OREANDA-NEWS. S&P Global Ratings today assigned its 'B-' long-term issue rating and 'cnB' long-term Greater China regional scale rating to a proposed issue of U. S.-dollar-denominated senior unsecured notes by China South City Holdings Ltd. (B/Negative/--; cnB+/--). The issue ratings are subject to our review of the final issuance documentation.

The issue rating is one notch below the long-term corporate credit rating on CSC to reflect structural subordination risk. CSC intends to use the proceeds primarily to refinance its existing debts and for general corporate purposes.

The negative outlook on the corporate credit rating on CSC reflects our view that the company's operating conditions will remain challenging over the next 12 months amid weakness in trade-center sales in China. We expect a mild recovery in CSC's contracted sales in the period. The company's recurring income is also likely to moderately increase as some of its projects mature. We also anticipate that CSC will restrain its expenditure and improve its leverage in the fiscal year ending March 31, 2017.

The rating on CSC reflects the company's high financial leverage, substantial short-term borrowings, and weak operating performance. The company's high cash position, diverse funding channels, growing stable recurring incomes, and good market position in the trade-center industry in China temper these weaknesses.