OREANDA-NEWS. December 08, 2015. Fitch Ratings has assigned Hongkong Baorong Development Limited's (HKBR) USD500m 3.625% senior unsecured notes due 2018 final ratings of 'BBB+'.

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 25 November 2015.

The notes issued by HKBR benefits from a keepwell and liquidity support deed and a deed of equity interest purchase undertaking issued by Tianjin Free Trade Zone Investment Holding Group Co., Ltd (Tianjin FTZIH). The proceeds will be used to support major projects, construction and development plans in China, and for working capital and general corporate purposes.

KEY RATING DRIVERS
In place of a guarantee, Tianjin FTZIH has granted a keepwell and liquidity support deed and a deed of equity interest purchase undertaking to ensure HKBR has sufficient assets and liquidity to meet its obligations.

The notes are rated at the same level as Tianjin FTZIH's IDRs, given the strong linkage between HKBR and Tianjin FTZIH and because the keepwell and liquidity support deed and deed of equity interest purchase undertaking signal a strong intention from Tianjin FTZIH to ensure that HKBR has sufficient funds to honour its debt obligations.

Fitch also believes Tianjin FTZIH 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 HKBR could have significant negative repercussions on Tianjin FTZIH for any further offshore funding.

RATING SENSITIVITIES
An upgrade of Fitch's internal credit assessment of Tianjin Municipality as well as a stronger and/or more explicit support commitment from the municipality may trigger a positive rating action on Tianjin FTZIH.

Significant weakening of Tianjin FTZIH's strategic importance to the municipality, dilution of the government's shareholding, and/or reduced explicit and implicit municipality support, may result in a downgrade. A downgrade could also stem from a weaker fiscal performance or increased indebtedness of the municipality, leading to deterioration in the sponsor's internally assessed creditworthiness.

Any rating action on Tianjin FTZIH will result in a similar rating action on the rated bond issued by HKBR.