Fitch Rates China Orient Asset Management's MTN Programme, USD Notes Final 'A-'

Mon Sep 1, 2014 5:47am EDT

(The following statement was released by the rating agency) HONG KONG/BARCELONA, September 01 (Fitch) Fitch Ratings has assigned China Orient Asset Management Corporation's (COAM; A-/Stable) USD2bn medium-term note (MTN) programme a final Long-Term Rating of 'A-'. At the same time, Fitch has assigned the USD600m 3.75% senior unsecured notes due 2019 and USD400m 5% senior unsecured notes due 2024 issued under the MTN programme final ratings of 'A-'. The company plans to use the proceeds of the proposed US dollar notes as working capital and for general corporate purposes. The assignment of the final ratings on the MTN programme and US dollar denominated notes follows the receipt of documents conforming to information already received. The final ratings are in line with the expected rating assigned on 25 August 2014. KEY RATING DRIVERS - MTN Programme and US Dollar Senior Unsecured Notes The notes under the MTN programme will be issued by Charming Light Investments Ltd. (CLI), and are unconditionally and irrevocably guaranteed by China Orient Asset Management (International) Holding Limited (COAMI), a wholly owned subsidiary of COAM. The notes under the MTN programme will be senior unsecured obligations of COAMI and also rank pari passu with all other obligations of COAMI. COAM has granted a keepwell deed and a deed of equity interest purchase and investment undertaking to ensure that COAMI has sufficient assets and liquidity to meet its obligations under the guarantee for the notes under the MTN programme. The notes under the MTN programme are rated at the same level as COAM's Issuer Default Rating (IDR), given the strong link between COAMI and COAM and because the keepwell deed and deed of equity interest purchase and investment undertaking transfer the ultimate responsibility of payment to COAM. In Fitch's opinion, both the keepwell deed and the deed of equity interest purchase and investment undertaking signal a strong intention from COAM to ensure that COAMI has sufficient funds to honour the debt obligations. The agency also believes COAM intends to maintain its reputation and credit profile in the international offshore market, and is unlikely to default on its offshore obligations. Additionally, a default by COAMI could have significant negative repercussions on COAM for any future offshore funding. Fitch's rating on the MTN programme is for the programme in general and individual issues under it may not be assigned the same rating as the programme's. The proposed MTN programme allows COAM to make drawdowns under the keepwell deed and deed of equity interest purchase and investment undertaking via CLI as the issuer or through a direct guarantee structure provided by COAM via United Wealth Development Ltd. (UWD) as the issuer. UWD is an indirect wholly-owned subsidiary of COAM. RATING SENSITIVITIES - MTN Programme and US Dollar Senior Unsecured Notes Any rating action on COAM's IDR would result in similar rating actions on the MTN programme and the rated notes under the MTN programme. In addition, the rating on the MTN programme will be downgraded if there is a material adverse change in the Chinese capital account regulation that results in restraints on COAM providing timely cross-border support for the debt servicing of the notes. Contacts: Primary Analyst Terry Gao Director +852 2263 9972 Fitch (Hong Kong) Limited 2801, Tower Two, Lippo Centre 89 Queensway, Hong Kong Secondary Analyst Fernando Mayorga Managing Director +34 93 323 8400 Committee Chairperson Guido Bach Senior Director + 49 69 768076 111 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com. Applicable criteria 'Rating of Public Sector Entities - Outside the United States', dated 4 March 2014 is available at www.fitchratings.com. Applicable Criteria and Related Research: Rating of Public Sector Entities - Outside the United States - Effective from 4 March 2013 to 4 March 2014 here Additional Disclosure Solicitation Status 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 WEBSITE '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. 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.

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