S&P rates ChemChina bonds BBB

S&P said it assigned a BBB long-term issue rating and cnA long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured bonds by CNAC (HK) Finbridge Co. Ltd., a wholly owned subsidiary of China National Chemical Corp. (ChemChina).

Proceeds will be used to refinance the company's existing debt and for general corporate purposes, S&P said.

ChemChina provides an unconditional and irrevocable guarantee for the bonds, the agency noted.

ChemChina is a chemical conglomerate that is wholly-owned by the Chinese government through State-owned Assets Supervision and Administration Commission (Sasac) of the State Council, S&P explained.

The rating on the bonds is the same as the issuer credit rating on ChemChina even though the company's ratio of priority liabilities-to-adjusted total assets exceeds 20%, the agency said.

The company's diverse businesses and downstream loans could temper the structural subordination risk, S&P said.

The ratings on ChemChina also consider the extraordinary government support if needed, which could flow to the bonds given that the company's guarantee constitutes its senior obligations, the agency said.

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