Fitch gives China Grand Auto notes B+

Fitch Ratings said it assigned China Grand Automotive Services Ltd.'s planned dollar-denominated senior unsecured notes a B+ rating with an RR4 recovery rating. The company is wholly owned by China Grand Automotive Services Group Co., Ltd., (CGA) rated B+, which will guarantee the securities.

“The proposed notes are rated at the same level as CGA's senior unsecured rating as they will constitute its direct and senior unsecured obligations,” Fitch said in a press release.

CGA also reported a concurrent cash tender offer to refinance part of its $400 million of 5 5/8% senior perpetual securities rated B. The offer is subject to completion of the dollar-denominated senior note issuance and is capped at 50% of the note's issuance amount.

Other than funding the tender offer, CGA plans to use the proceeds for the repayment of offshore bonds due and refinancing of onshore debt.

“However, Fitch assumes CGA has sufficient liquidity to repay its U.S. dollar bonds due July 2021 even if the new issuance does not proceed,” the agency said.

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