S&P rates CAR notes BB+

Standard & Poor’s said it assigned a BB+ long-term issue rating and cnBBB+ long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured notes by CAR Inc.

The rating on the notes is the same as the corporate credit rating on CAR even though the ratio of priority claims-to-total assets could exceed the 15% threshold in 2015, the agency said.

S&P said it expects CAR to use the notes proceeds through shareholder loans to repay onshore borrowings and to fuel fleet expansion to mitigate the structural subordination risk associated with debt at the holding company level.

CAR operates in different regions in China with subsidiaries that are operationally integrated. This diversity reduces the structural subordination risk, the agency said.

The stable rating outlook reflects a view that the company’s cash flows from both short-term and long-term rentals will continue to increase, S&P said.

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