Moody's rates SDIC notes A2

Moody's Investors Service said it assigned A2 senior unsecured ratings to the proposed $1 billion notes to be drawn down under the $3 billion guaranteed medium-term note program issued by Rongshi International Finance Ltd. and guaranteed by State Development & Investment Corp. (SDIC).

The outlook is stable.

The proceeds will be used for financing and refinancing eligible green projects.

The rest of the proceeds will be used for debt refinancing, overseas project construction and general corporate purposes, Moody's said.

The ratings reflect the unconditional and irrevocable guarantee from SDIC, the agency said.

The proposed notes will not materially increase SDIC's overall debt level because part of the proceeds will be used for refinancing, Moody's said.

The notes will instead be used to improve SDIC's liquidity and debt-maturity profile, the agency added.

The ratings on SDIC are primarily driven by its standalone credit profile, as illustrated by its Baa3 baseline credit assessment, Moody's said, and an assessment of a very high likelihood of support from and very high level of dependence the government of China, the company's owner.

The ratings are constrained by the company's modest financial profile, large investment and capital spending plan, Moody's said, along with the execution risks related to development in new areas.

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