Moody’s rates Shanghai Electric notes A2

Moody's Investors Service said it assigned a provisional A2 senior unsecured debt rating to the proposed euro notes to be issued by Shanghai Electric Newage Co. Ltd. and guaranteed by Shanghai Electric Group Co. Ltd. (SHE).

The outlook is stable.

Proceeds will be used to refinance the company's offshore debt, funding its capital expenditure and working capital needs, as well as for general corporate purposes.

Moody's will remove the provisional status of the euro bond rating, after the company has registered its guarantee with the State Administration of Foreign Exchange.

"The proposed notes issuance will improve SHE's debt maturity profile and will have a limited impact on its credit metrics as most of the proceeds will be used to refinance the company's offshore debt," Moody's vice president and senior analyst Gerwin Ho said in a news release.

"Moody's expects SHE to incur capital expenditures in the next two years which will increase its debt leverage. But the leverage level will remain acceptable for SHE's A2 rating category," Moody's assistant vice president and analyst Jiming Zou added in the release.

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