S&P gives China Aoyuan notes B

S&P said it assigned its B long-term issue rating to a proposed issue of dollar-denominated senior unsecured notes by China Aoyuan Property Group Ltd. (B+/stable/--).

The agency said the rating is one notch lower than the long-term corporate credit rating on Aoyuan to reflect the structural subordination risk.

“Aoyuan intends to use the proceeds from the proposed notes to refinance its existing debt. We believe the company will continue to reduce its average funding cost, from 7.6% as of June 30, as it replaces more expensive borrowings such as the 11¼% 2015 senior notes,” S&P said in a news release.

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