Fitch rates Nan Fung securities BBB-

Fitch Ratings said it assigned BBB- rating to Nan Fung Treasury (II) Ltd.'s $500 million perpetual capital securities.

Nan Fung Treasury (II) is a wholly owned subsidiary of Nan Fung International Holdings Ltd., Fitch said.

The perpetual securities are irrevocably and unconditionally guaranteed by Nan Fung, the agency said.

The proceeds will be used for general working capital of the company and its subsidiaries, Fitch said.

There was no equity credit assessed on the perpetual capital securities and they are rated one notch below Nan Fung's BBB issuer default rating, the agency explained, to reflect the incremental risk relative to the issuer default rating.

Fitch said it believes the hybrid security will be a permanent part of the group's capital structure, following discussions with management that indicate it is committed to hybrid capital.

The ratings are supported by the company's stable rental income and recurring income from its investment property portfolio, the agency said.

Its financial position is expected to remain solid and its liquidity is expected to remain robust after factoring in the company's development expenditure and capital expenditure over the medium term, Fitch said.

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