Moody’s gives Languang Development notes B2

Moody’s Investors Service said it assigned a B2 senior unsecured rating to the proposed notes to be issued by Hejun Shunze Investment Co., Ltd., and guaranteed by Sichuan Languang Development Co., Ltd.

The B2 senior unsecured rating is a notch lower than Languang Development’s B1 CFR due to structural subordination risk. The subordination risk is that most of Languang Development’s claims are at its operating subsidiaries and prioritize claims at the holding company in a bankruptcy scenario, the agency said.

Languang Development plans to use the proceeds to refinance its offshore debt.

“The proposed bond issuance will lengthen Languang Development’s debt maturity profile and improve its liquidity without having a material impact on its credit profile because the company will use the proceeds to refinance maturing debt,” Moody’s said in a press release.

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