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Fitch Rates Zhanglong's USD Bond Tap Final 'BB+'
February 13, 2017 / 2:54 PM / 7 months ago

Fitch Rates Zhanglong's USD Bond Tap Final 'BB+'

(The following statement was released by the rating agency) HONG KONG, February 13 (Fitch) Fitch Ratings has assigned Fujian Zhanglong Group Co., Ltd.'s (Zhanglong, BB+/Stable) USD150m tap of its 4.5% senior unsecured notes due 2019 a final rating of 'BB+'. The tap issuance will carry the same terms and conditions as the earlier USD150m issuance of notes. KEY RATING DRIVERS The notes are issued directly by Zhanglong and are rated at the same level as its Issuer Default Rating. The notes constitute Zhanglong's direct, unconditional, unsubordinated and unsecured obligations and rank at least pari passu with all its other present and future unsecured obligations. The assignment of the final rating follows the receipt of documents conforming to information already received and the final rating is in line with the expected rating assigned on 24 January 2017. Zhanglong is wholly owned by the Zhangzhou State-Owned Assets Supervision and Administration Commission (SASAC) and is supervised by Zhangzhou municipality. Zhanglong's ratings are credit-linked with, but not equalised to, Fitch's internal credit assessment of Zhanglong municipality. This link reflects strong municipal control and oversight, mid-range assessment of Zhanglong's strategic importance to the municipality, integration with the government budget and legal status. These factors result in a high likelihood of extraordinary support, if needed, from the municipality. The municipality monitors Zhanglong's major project investments and financing plans. The company has also been receiving subsidies from the municipality and more than CNY800m in other receivables were due from government entities as at end-2015. As one of the municipality's largest investment and financing vehicles, Zhanglong plays an important role in the city's daily operations and development. It is the city's sewage treatment service provider and its major water supplier to urban areas. It is also a designated agency for sourcing building materials for certain local government-owned housing and infrastructure projects. RATING SENSITIVITIES Any rating action on Zhanglong's Issuer Default Rating would result in similar rating action on the US dollar notes. Contact: Primary Analyst Jean Luo Associate Director +852 2263 9952 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central, Hong Kong Secondary Analyst Terry Gao Director +852 2263 9972 Committee Chairperson Vladimir Redkin Senior Director +7 495 956 2405 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Date of relevant rating committee: 29 November 2016 Additional information is available on www.fitchratings.com Applicable Criteria International Local and Regional Governments Rating Criteria - Outside the United States (pub. 18 Apr 2016) here Rating of Public-Sector Entities – Outside the United States (pub. 22 Feb 2016) here Additional Disclosures Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. 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