Suzhou SND proposed offshore yuan notes receive BBB+ rating from Fitch
Suzhou SND Group Company Limited is moving to refinance offshore borrowings through a proposed offshore yuan bond sale backed by its existing credit profile. The planned notes are issued by its offshore subsidiary and carry an unconditional and irrevocable guarantee from the China-based parent.
Highlights
- SND International (BVI) Co., Ltd.'s proposed senior unsecured offshore yuan bonds received a BBB+ rating from Fitch, matching Suzhou SND Group's Long-Term Issuer Default Rating.
- Bond proceeds will refinance outstanding offshore debt, adhering to the National Development and Reform Commission certificate and SNDG's sustainable finance framework.
- Any rating change on Suzhou SND Group would automatically trigger an equivalent action on the bonds, keeping the bond rating strictly tied to the parent company's credit standing.
Bond structure and refinancing plan
As reported by Fitch Ratings, the proposed senior unsecured offshore yuan bonds issued by SND International (BVI) Co., Ltd. are assigned a BBB+ rating, the same level as Suzhou SND Group Company Limited's Long-Term Issuer Default Rating. The alignment reflects SNDG's unconditional and irrevocable guarantee for the notes.The bonds constitute the issuer's direct, unsubordinated, unconditional and unsecured obligations, and rank pari passu with its other obligations. SNDG's obligations under the guarantee also rank at least equally with all its other present and future unsecured and unsubordinated obligations.
Proceeds from the issuance are to be used to refinance outstanding offshore debt in line with the National Development and Reform Commission certificate and SNDG's sustainable finance framework.
Role in Suzhou New District and rating sensitivities
SNDG is an integrated city operator and the largest government-related entity in Suzhou New District in Suzhou, Jiangsu province. The company plays a central role in policy-driven activities including urban development, public asset operations, industrial investments and related financing.Fitch says any negative rating action on SNDG would lead to similar action on the proposed offshore yuan notes, while any positive rating action on the company would also be mirrored on the notes. That keeps the bond rating directly tied to the parent's credit standing.
Earlier, we reported that Hainan Rubber planned subordinated perpetual sustainable securities issued by Halcyon Agri and rated BBB- by Fitch.
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