S&P rates Citic notes BBB+

S&P said it assigned a BBB+ long-term issue rating to a proposed drawdown of the medium-term note program of Citic Ltd., a core subsidiary of Citic Group Corp.

The rating is subject to a review of the final issuance documentation.

S&P said it expects Citic to use the issuance proceeds for general corporate purposes, including refinancing its outstanding debt.

The agency also said it equalized the rating with the corporate credit rating on Citic.

Despite a significant amount of priority debt in Citic's capital structure, S&P said it believes the risk of subordination is mitigated by a view that the government may intervene in a bankruptcy process.

The agency said it sees a very high likelihood that the Chinese central government will provide sufficient and timely extraordinary support to Citic Group in the event of financial distress.

The notes will rank equally with all other senior unsecured debt of Citic, S&P said.

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