OREANDA-NEWS. November 17, 2015. Fitch Ratings has assigned final ratings of 'A' to Huarong Finance II Co. Ltd's USD500m of 2.875% senior unsecured notes due 2018, USD500m of 3.75% senior unsecured notes due 2020, and USD800m of 5% senior unsecured notes due 2025 issued under a USD5bn medium-term note (MTN) programme. The proceeds will be used as working capital and for general corporate purposes.

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 10 November 2015.

KEY RATING DRIVERS

The notes will be unconditionally and irrevocably guaranteed by China Huarong International Holdings Limited (Huarong International; previous name: Huarong (HK) International Holding Limited), a wholly owned subsidiary of China Huarong. They are issued under China Huarong's MTN programme, and will be senior unsecured obligations of Huarong International and rank pari passu with all other senior unsecured obligations of Huarong International.

In place of a guarantee, China Huarong has granted a keepwell deed and a deed of equity interest purchase, investment and liquidity support undertaking to ensure that Huarong International has sufficient assets and liquidity to meet its obligations under the guarantee for the notes under the MTN programme.

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

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

China Huarong was established in 1999 and is one of four big asset management companies (AMCs) approved and set up by the State Council to safeguard the country's economic and financial stability. China Huarong had the largest consolidated balance sheet size and the highest net profit in 2014 among the big four national AMCs.

RATING SENSITIVITIES

Any rating action on China Huarong's IDR would result in similar rating action on the MTN programme and rated notes.