Fitch rates SFund bonds A-

Fitch Ratings said it assigned an expected A- rating to Guangzhou Industrial Investment Fund Management Co., Ltd.'s (SFund) proposed tap of its dollar-denominated senior unsecured bonds.

The tap issuance will carry the same terms and conditions as the earlier issuance of $200 million of 3.85% bonds due 2021.

The offshore bonds will be issued by Guangzhou Silk Road Investment Ltd., which is an indirect, wholly owned subsidiary of SFund.

SFund will provide an unconditional and irrevocable guarantee to the proposed bonds, Fitch said.

The proceeds will be used for offshore working capital and general corporate purposes, the agency said.

The ratings are credit-linked, but not equalized with those of Guangzhou municipality, Fitch said.

The link reflects strong government control and oversight, mid-range strategic importance to the municipality, integration with the government budget and legal status, the agency said.

These factors result in a high likelihood of extraordinary support, if needed, from the municipality, Fitch said.

Guangzhou municipality is generally considered a first-tier city in China and its gross regional product (GRP) ranks third among all Chinese cities, just behind Beijing and Shanghai, the agency said.

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