OREANDA-NEWS. Fitch Ratings has affirmed Charming Light Investments Ltd. medium-term note (MTN) programme at 'A', after the size of the programme was doubled to USD4bn, as the programme's rating is driven by the ultimate parent company, China Orient Asset Management Corporation (China Orient, A/Stable) and the creditworthiness of the China sovereign (A+/Stable).

Fitch has also assigned Charming Light Investments Ltd's proposed issue of US dollar senior unsecured notes under the programme an expected rating of 'A(EXP)'. Final ratings on the proposed US dollar notes are contingent upon the receipt of final documents conforming to information already received.

KEY RATING DRIVERS:

The proposed notes under the MTN programme are unconditionally and irrevocably guaranteed by China Orient Asset Management (International) Holding Ltd (COAMI, A-/Stable), a wholly owned subsidiary of China Orient. The notes will be senior unsecured obligations of COAMI and rank pari passu with its other senior unsecured obligations.

China Orient has granted a keepwell and a deed of equity interest purchase undertaking, in place of a guarantee, to ensure COAMI has sufficient assets and liquidity to meet its obligations under the guarantee for the proposed notes.

The proposed notes' expected rating is at the same level as China Orient's Issuer Default Rating (IDR), due to the strong link between China Orient and COAMI and because the keepwell deed and deed of equity interest purchase undertaking transfer the ultimate responsibility of payment to China Orient.

Fitch believes the keepwell and the deed of equity interest purchase undertaking signal a strong intention from China Orient to ensure COAMI has sufficient funds to honour its debt obligations. The agency also believes China Orient intends to maintain its reputation and credit profile in the international offshore market and is unlikely to default on offshore obligations. Furthermore, a default by COAMI could have significant negative repercussions on China Orient for any future offshore funding.

Fitch emphasises that the MTN programme's rating is for the programme in general and there is no assurance that notes under the programme will be assigned a rating or that the rating assigned to a specific issue under the programme will have the same rating as that assigned to the programme.

China Orient is one of four large national asset management companies established to mitigate financial risks, preserve state-owned assets and promote the reform and development of China's financial system.

RATING SENSITIVITIES

Any rating action on China Orient's IDR would result in similar rating action on the programme and rated notes. Any rating action on the sovereign will likely have similar action on China Orient's IDR.