CIFI Holdings (Group) Co. Ltd.'s Proposed U.S. Dollar Senior Unsecured Notes Assigned 'B+' Rating


HONG KONG (S&P Global Ratings) Feb. 14, 2019--S&P Global Ratings today 
assigned its 'B+' long-term issue rating to the U.S.-dollar-denominated senior 
unsecured notes that CIFI Holdings (Group) Co. Ltd. (BB-/Positive/--) proposes 
to issue. The issue rating is subject to our review of the final issuance 
documentation.

In our view, the new issuance will slightly extend CIFI's debt maturity 
profile. However, it won't significantly affect the China-based developer's 
credit profile. The company intends to use the proceeds for refinancing its 
existing debt and general corporate purposes.

We rate the notes one notch below the issuer credit rating on CIFI to reflect 
subordination risk. As of June 30, 2018, the company's priority debt consists 
of about Chinese renminbi (RMB) 33 billion in secured debt and RMB16 billion 
in unsecured debt at the subsidiary level. This debt together accounts for 
around 65% of CIFI's total reported debt, a ratio which is higher than our 
notching down threshold of 50%. All debt amounts include guarantees to joint 
ventures. 

The positive outlook reflects our view that we may raise the rating on CIFI if 
the company can expand its scale and diversity to be comparable to that of 
larger peers in the 'BB' rating category. At the same time, we expect CIFI to 
maintain its see-through leverage (debt-to-EBITDA ratio after proportionally 
consolidating joint ventures) at 5.0x-5.5x.
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