November 20, 2017 / 4:55 PM / in a year

Fitch Assigns Huarong Real Estate First-Time 'A' Rating

(The following statement was released by the rating agency) TAIPEI, November 20 (Fitch) Fitch Ratings has assigned China-based Huarong Real Estate Co., Ltd. (Huarong Real Estate) a Long-Term Issuer Default Rating (IDR) of 'A' and a Short-Term IDR of 'F1'. The Outlook is Stable. Fitch has also assigned an 'A(EXP)' expected rating to the proposed senior unsecured notes to be issued by Huarong Universe Investment Holding Limited (Huarong Universe), a wholly owned subsidiary of Huarong Real Estate incorporated in British Virgin Islands. The proposed notes will be unconditionally and irrevocably guaranteed by Huarong Real Estate. The notes will be listed on the Irish Stock Exchange and the proceeds of the proposed notes will be used for general corporate purposes. The maturity structure will be finalized upon settlement. The final ratings on the proposed notes are contingent upon the receipt of final documents conforming to information already received. Huarong Real Estate is a direct and wholly owned subsidiary of China Huarong Asset Management Co., Ltd. (China Huarong, A/Stable), headquartered in Beijing. The company operates and serves as the exclusive platform for onshore property-related distressed asset development, and also plays a key role in overseeing China Huarong's offshore business operations, including acting as the group's offshore funding center. KEY RATING DRIVERS IDRS Huarong Real Estate's ratings are equalized with those of China Huarong, underpinned by Fitch's view of an extremely high probability of support from China Huarong, given its role as core subsidiary of the parent group and reputational risk to the parent in the case of default. Huarong Real Estate's ratings are equalized with those of the parent as Fitch considers Huarong Real Estate a core subsidiary of China Huarong. The ratings of China Huarong are linked to those of the Chinese sovereign (A+/Stable) and notched down once, reflecting the company's state ownership (63.36%) and strong control by the authorities. (See <a href="https//">Fitch Affirms China Huarong at 'A'; Outlook Stable, published on 29 June 2017). Huarong Real Estate actively participates in the distressed asset-based property development, leveraging on the group's leading franchise in China's distressed asset market. The company is an integral part of the parent's distressed asset resolution and is able to source on a selective basis distressed property from the parent's large distressed asset pool. It also serves as the platform to facilitate the parent's overseas business which is currently primarily focused on supporting China's "One-Belt One-Road" strategy in offshore markets. Huarong Real Estate shares the parent group's brand name, and enjoys strong synergies with the parent group through leveraging China Huarong's customer base and network to expand its business. Support from the parent has been strong as evidenced by the parent's provision of guarantees on some of its bank credits as well as liquidity support in the forms of shareholder loans and interbank borrowings. Total parent funding support through guarantee provision, shareholder loans, and interbank borrowings accounted for 14% of the company's total debt funding as of end-2016. The Stable Outlook reflects our expectation that Huarong Real Estate's role as core subsidiary and the probability to receive extraordinary support from China Huarong will remain unchanged in the next 12-18 months. SENIOR NOTES The proposed senior unsecured notes to be issued by Huarong Universe will be unconditionally and irrevocably guaranteed by Huarong Real Estate and constitute general, unsecured and unsubordinated obligations of Huarong Real Estate. The notes will rank pari passu with Huarong Real Estate's all other present and future unsecured and obligations. Therefore, the 'A(EXP)' expected rating on the proposed notes is aligned with Huarong Real Estate's Long-Term IDR of 'A'. RATING SENSITIVITIES IDRS AND SENIOR NOTES Any change to China Huarong's ratings, which would most likely reflect shifts in the perceived propensity or ability of the state to support China Huarong in a timely manner, will affect ratings on Huarong Real Estate to the same magnitude. In addition, a rating downgrade could be triggered by a weakening in the linkage between China Huarong and Huarong Real Estate, which could result from material reduction of the subsidiary's role in supporting the group's core functions or a significant dilution of China Huarong's stake in the company. Any changes to Huarong Real Estate's ratings will have direct impact on rating of the notes guaranteed by Huarong Real Estate to the same magnitude. Contact: Primary Analyst Rowena Chang Associate Director +886 2 8175 7602 Fitch Australia Pty Ltd, Taiwan Branch Suite 1306, 13F, 205, Tun Hwa N. Rd., Taipei, Taiwan Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: Additional information is available on Applicable Criteria Global Non-Bank Financial Institutions Rating Criteria (pub. 10 Mar 2017) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here 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. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below