Fitch: Rating of Beijing Infrastructure's MTN Programme Unaffected by Increase in Size
BII increased the size of its MTN programme to USD6bn from USD2bn on 24 June 2015 to meet its funding needs for the development of the urban railway transit system in Beijing and as working capital as well as for general corporate purposes.
The increase in size of the MTN programme will not have material implications on the programme's long-term rating of 'A+', given BII's ratings are mainly driven by the creditworthiness of Beijing Municipality.
KEY RATING DRIVERS
The notes under the MTN programme are issued by Eastern Creation II Investment Holdings Ltd., and are unconditionally and irrevocably guaranteed by Beijing Infrastructure Investment (Hong Kong) Limited (BII HK), a wholly owned subsidiary of BII. The notes under the MTN programme are senior unsecured obligations of BII HK and rank pari passu with all other obligations of BII HK.
In place of a guarantee, BII has granted a keepwell and liquidity support deed as well as a deed of equity interest purchase undertaking to ensure that BII HK has sufficient assets and liquidity to meet its obligations under the guarantee for the notes under the MTN programme.
The notes under the MTN programme are rated at the same level as BII's Issuer Default Rating (IDR), given the strong link between BII HK and BII, and because the keepwell and liquidity support deed and deed of equity interest purchase undertaking, transfer the ultimate responsibility of payment to BII.
In Fitch's opinion, both the keepwell and liquidity support deed and the deed of equity interest purchase undertaking, signal a strong intention from BII to ensure that BII HK has sufficient funds to honour the debt obligations. The agency also believes BII intends to maintain its reputation and credit profile in the international offshore market, and is unlikely to default on its offshore obligations. Additionally, a default by BII HK could have significant negative repercussions on BII for any future offshore funding.
RATING SENSITIVITIES
Any rating action on BII's IDR would result in similar rating actions on the MTN programme and the rated notes under the MTN programme.
Комментарии