Fitch rates BSAM notes A

Fitch Ratings said it affirmed Beijing State-Owned Assets Management Co., Ltd.’s (BSAM) long-term foreign-currency issuer default rating of A and senior unsecured rating of A.

Fitch also said it assigned final ratings of A to Beijing State-Owned Assets Management (Hong Kong) Co. Ltd.’s $300 million 3% senior unsecured notes due 2020 and $700 million 4 1/8% senior unsecured notes due 2025.

The proceeds will be used to refinance certain existing indebtedness and for working capital and general corporate purposes, the agency said.

The outlook is stable.

In place of a guarantee, BSAM has granted support deeds to ensure its Hong Kong counterpart has sufficient assets and liquidity to meet its obligations, Fitch said.

The notes are rated at the same level as BSAM’s issuer default rating, given the strong linkage between the two companies and because the deeds transfer the ultimate responsibility of payment to BSAM, the agency said.

BSAM’s ratings are credit-linked to Beijing municipality, Fitch said.

This is reflected in BSAM’s 100% government ownership, strong municipal oversight on its financial results and strategic importance of the entity’s operation to the municipality, the agency said.

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