TEXT-S&P rates Amber Circle Funding proposed notes 'AA-'

Tue Nov 20, 2012 3:41am EST

Nov 20 - Standard & Poor's Ratings Services said today that it had assigned its 'AA-' long-term rating to the proposed issue of unsecured notes by Amber Circle Funding Ltd. (unrated), a limited liability company incorporated in the Cayman Islands. The China Development Bank Hong Kong Branch will guarantee the proposed notes. The rating on the notes is subject to our review of the final issuance documentation.

The issue rating is equalized with the issuer rating on China Development Bank (CDB; AA-/Stable/A-1+, cnAAA/cnA-1+). The equalization is based on our view of the integral link between CDB and its Hong Kong branch, and on the strength of the unconditional irrevocable and timely guarantee issued by the branch.

In the unlikely scenario that the CDB head office needs to service the guarantee on behalf of the Hong Kong branch, we believe the CDB's capacity to mobilize funds from overseas sources could mitigate the marginal risk that CDB may not get timely regulatory approval to transfer funds out of mainland China to service the guarantee.

We expect the proceeds from the issuance to be lent to SinoAero Leasing Co. Ltd., CDB Leasing's wholly owned subsidiary that carries its international leasing business. CDB holds almost 90% of CDB Leasing as of end 2011.

RELATED CRITERIA AND RESEARCH

-- Banks: Rating Methodology And Assumptions, Nov. 9, 2011

-- Timeliness of Payments: Grace Periods, Guarantees, And Use Of 'D' And 'SD' Ratings, Dec. 23, 2010

-- Rating Government-Related Entities: Methodology And Assumptions, Dec. 9, 2010

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