OREANDA-NEWS. Fitch Ratings has assigned Jiangsu Fang Yang Group Co., Ltd's (Fang Yang) USD200m 5.35% senior unsecured notes due 2019 a final rating of 'BB'.

The assignment of the final ratings follows the receipt of documents conforming to information already received. The final ratings are in line with the expected ratings assigned on 15 September 2016.

KEY RATING DRIVERS

The notes are issued by Haichuan International Investment Co., Ltd. and are unconditionally and irrevocably guaranteed by Fang Yang Commerce Trade Company Limited (FYCT), a wholly owned subsidiary of Fang Yang. The notes are senior unsecured obligations of FYCT and rank pari passu with all other obligations of FYCT.

In place of a guarantee, Fang Yang has granted a keepwell and liquidity support deed and a deed of equity interest purchase undertaking to ensure FYCT has sufficient assets and liquidity to meet its obligations under the guarantee for the notes.

The notes are rated at the same level as Fang Yang's Issuer Default Rating, given the strong link between Fang Yang and FYCT and because the keepwell and liquidity support deed and deed of equity interest purchase undertaking transfer the ultimate responsibility of payment to Fang Yang.

In Fitch's opinion, both the keepwell and liquidity support deed and the deed of equity interest purchase undertaking signal a strong intention from Fang Yang to ensure FYCT has sufficient funds to honour the debt obligations. The agency also believes Fang Yang intends to maintain its reputation and credit profile in the international offshore market and is unlikely to default on its offshore obligations. In addition, a default by FYCT could have significant negative repercussions on Fang Yang for any future offshore funding.

Fang Yang's ratings are credit linked to, but not equalised with, Fitch's assessment of the creditworthiness of Lianyungang Municipality. Its 100% municipality ownership and the strategic importance of the entity's operation to the municipality result in a high likelihood of extraordinary support, if needed. Therefore, Fang Yang is classified as a credit-linked public-sector entity under Fitch's criteria.

RATING SENSITIVITIES

Rating action on Fang Yang would lead to similar action on the rating of the bonds issued by Haichuan International Investment Co., Ltd.