Moody's rates CNPC notes A1

Moody's Investors Service said it assigned an A1 rating with a stable outlook to the dollar-denominated notes to be issued by CNPC General Capital Ltd., a special-purpose vehicle incorporated in the British Virgin Islands and indirectly owned by China National Petroleum Corp. (Aa3/positive).

The notes will be guaranteed by CNPC Finance (HK) Ltd., whose immediate parent is China Petroleum Finance Co. Ltd. Moody's has affirmed CNPC Finance (HK)'s A1 issuer rating with a stable outlook and also revised the outlook to stable from positive for the A1 rating of the existing guaranteed notes issued by CNPC (HK) Overseas Capital Ltd., CNPC Golden Autumn Ltd. and CNPC General Capital Ltd.

The proceeds from the proposed notes will be used to grant loans to an offshore subsidiary controlled by China National Petroleum.

The agency said the A1 rating of the notes reflects the close linkage of both the guarantor and its parent with their ultimate parent, China National Petroleum, and the two companies' strategic importance within the group; the regulatory framework in China that recognizes and oversees the onshore and offshore roles that the guarantor and its parent fulfill for the broader CNPC group; and the presence of keepwell agreements in favor of the guarantor from both its parent and China National Petroleum.

The A1 rating of the notes is lower than China National Petroleum's Aa3 rating, and Moody's said this reflects CNPC Finance (HK)'s modest standalone profile and its overall weaker credit profile when compared with that of China National Petroleum, given the lack of a direct guarantee.

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