(The following was released by the rating agency)
HONG KONG (Standard & Poor's) Nov. 7, 2012--Standard &
Poor's Ratings Services today assigned its 'BBB' issue rating
and its 'cnA' Greater China regional scale rating to a proposed
issue of U.S.-dollar denominated senior unsecured notes
unconditionally and irrevocably guaranteed by China Overseas
Land & Investment Ltd. (COLI: BBB/Stable/--; cnA/--).
China Overseas Finance (Cayman) V Ltd. will issue the
proposed Reg S issue of notes in two tranches. We expect the
terms and conditions of the proposed notes to be on par with
those of COLI's existing U.S. dollar senior unsecured notes.
The issue rating is subject to our review of the final
issuance documentation. We expect COLI to use the proceeds to
repay or refinance existing debt, to finance new and existing
projects, and for general corporate purposes.
The corporate credit rating on COLI reflects the company's
leading market position, good geographic diversification, and
"intermediate" financial risk profile. The rating also reflects
COLI's consistently solid operating performances since 2005 and
the company's track record of proactive financial management
through property cycles and strong financial flexibility.
COLI's lack of recurring income and its exposure to the
cyclical nature of the Chinese real estate market with high
regulatory risks partly offset the above strengths. The stable
outlook reflects our expectation that COLI will expand in a
controlled manner and maintain profit growth at about 20%
annually for the next three years.
We believe the company will maintain its proactive
financial management and strong execution capability in China.
In our view, COLI will mostly fund any accelerated growth
through property sales rather than debt. We believe gross debt
would increase, however, in line with profit and cash flow