OREANDA-NEWS. More-->S&P Global Ratings today assigned its 'BBB+' long-term issue rating and 'cnA+' long-term Greater China regional scale rating to a proposed issue of U. S. dollar-denominated senior unsecured notes by Chongqing Nan'an Urban Construction & Development (Group) Co. Ltd. (NAUCD: BBB+/Stable/--; cnA+/--).

The issue rating is subject to our review of the final issuance documentation. We expect NAUCD to use the issuance proceeds for general corporate uses. Earlier on, the company issued another two tranches of senior unsecured notes totaling US$800 million.

We have equalized the issue rating on the proposed senior unsecured notes with the corporate credit rating on NAUCD. We expect the debt to be more concentrated at the holding company after this bond issue and the previous issues, which will reduce its ratio of priority debt to total assets to 20%-30%. In addition, the company's priority debt is concentrated at a few operational subsidiaries while it has large assets/cash flows outside these leveraged subsidiaries. In our view, these factors could reduce the structural subordination risk associated with debt at the holding company level. The notes are subject to early redemption upon the occurrence of a change of control.

The rating on NAUCD reflects our opinion that there is an almost certain likelihood that Chongqing Nan'an district government will provide sufficient and timely extraordinary support to the company in the event of financial distress. Hence, the rating on NAUCD is driven by our assessment of the credit profile of the Nan'an district government.