Fitch rates Zhongguancun bonds A

Fitch Ratings said it published Zhongguancun Development Group’s long-term foreign- and local-currency issuer default ratings of A and also assigned the company’s proposed dollar-denominated senior unsecured bonds an A rating.

The proposed bonds will be sold by Zhongguancun’s subsidiary, ZGC International Investment Ltd., and will benefit from a keepwell deed and a deed of equity interest purchase undertaking. The company plans to use the proceeds for overseas investments, overseas refinancing and general corporate purposes.

The proposed bonds are rated at the same level as the company’s IDR. In Fitch’s opinion, the keepwell deed and the deed of equity interest purchase undertaking signal Zhongguancun’s strong intention to ensure ZGC International has sufficient funds to honor its debt obligations.

Fitch said it believes the company intends to maintain its reputation and credit profile in the international offshore market and is unlikely to default on offshore obligations.

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