Yihua Enterprise (Group) Co. Ltd.#s Proposed Guaranteed Senior Unsecured Notes Assigned #B-# Rating

Stocks and Financial Services Press Releases Wednesday October 4, 2017 17:04
HONG KONG--4 Oct--S&P Global Ratings

HONG KONG (S&P Global Ratings) Oct. 4, 2017--S&P Global Ratings today assigned its 'B-' long-term issue rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by Yihua Overseas Investment Ltd. Yihua Enterprise (Group) Co. Ltd. (Yihua group; B/Stable/--) will guarantee the notes.

Yihua Overseas is a wholly owned financing subsidiary of Yihua group. The rating on the notes is subject to our review of the final issuance documentation. Yihua group intends to use a substantial portion of the net proceeds to refinance existing borrowings and replenish its working capital; it will use the remaining for general corporate purposes.

The rating takes into account Yihua group's capital structure, which consists of about Chinese renminbi (RMB) 5.8 billion of secured debt, about RMB5.6 billion of unsecured debt issued by its subsidiaries, and RMB7.3 billion of unsecured debt issued by Yihua group, based on data as of Dec. 31, 2016.

We rate the proposed senior unsecured notes one notch below the corporate credit rating on Yihua group because the notes rank behind a significant amount of secured debt and debt issued by subsidiaries in the capital structure.


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