S&P gives China Construction notes BBB+

S&P said it gave a BBB+ long-term issue rating to 10-year tier-2 capital bonds that China Construction Bank Corp. issued.

“The rating on the bonds is two notches lower than the issuer credit rating on CCB. We made a one-notch downward adjustment for subordination and one notch for the issue's principal write-down feature,” the agency said in a press release.

S&P said it used the issuer rating and not the bank's stand-alone credit profile because CCB is a government-related entity for which it sees an "extremely high" likelihood of extraordinary support from the government of China in the case of need.

“We believe the government is very likely to take preemptive measures to prevent activation of a nonpayment-of-interest trigger on the bonds,” the agency said.

The outlook is stable.

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