Moody’s rates Guangxi Communications bond Baa3

Moody's Investors Service said it assigned a first-time Baa3 issuer rating to Guangxi Communications Investment Group Corp. Ltd.

The agency also said it assigned a Baa3 senior unsecured rating to the proposed bond that the company will issue.

The outlook is stable.

The proceeds from the proposed issuance will be used for general corporate purposes, Moody’s said.

The company’s rating combines its baseline credit assessment of B1 and a four-notch uplift based on an expectation of high support for the company from the Guangxi provincial government, the agency said.

The B1 baseline credit assessment reflects the company’s dominant position in Guangxi's toll road sector, stable traffic volume growth and proven track record of grants and subsidies from the local government, Moody’s said.

The rating is constrained by its very weak financial metrics and massive capital expenditure requirements, the agency added.

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