Moody's assigns Zhejiang Energy notes A2

Moody's Investors Service said it assigned an A2 rating to the planned dollar-denominated senior unsecured notes to be issued by Zhejiang Energy International Ltd., a wholly-owned subsidiary of Zhejiang Provincial Energy Group Co. Ltd. (ZEG).

The notes will be issued under Zhejiang Energy International 's $2 billion medium-term note program which the agency rates (P) A2.

"The A2 rating of the notes is one notch lower than ZEG's A1 issuer rating, reflecting the weakness in the priority of claims of bond investors under a keepwell structure, in the absence of a direct guarantee from ZEG," said Ivy Poon, a Moody's vice president and senior analyst, in a press release.

ZEG plans to use the proceeds for refinancing and general corporate purposes.

"The proposed issuance will have a limited impact on ZEG's total debt given the proceeds will be used for refinancing and general corporate purposes, which are incorporated in our projection," added Poon.

The outlook is stable.

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