Moody's assigns definitive rating to COSCO Finance (2011) Limited's bonds


Monday 3 December, 2012

Moody's Investors Service has assigned a definitive A1 rating to the US$1,000,000,000 4.00% Credit Enhanced Bonds due 2022 issued by COSCO Finance (2011) Limited.

The bonds are supported by an unconditional and irrevocable standby letter of credit from the Bank of China Limited (BOC, A1 stable), acting through its Beijing Branch.

Issuer: COSCO Finance (2011) Limited

.... US$1,000,000,000 4.00% Credit Enhanced Bonds due 2022, assigned A1

The rating of the bonds addresses the expected loss posed to investors by the legal final maturity.

Moody's rating addresses only the credit risks associated with the transaction. Other non-credit risks have not been addressed, but may have a significant effect on yield to investors.

RATINGS RATIONALE

The A1 rating of the bonds is the same as BOC's senior unsecured debt rating as the bonds are fully supported by an unconditional and irrevocable standby letter of credit provided by BOC through its Beijing Branch.

The standby letter of credit is an unconditional, unsecured and unsubordinated obligation of BOC. BOC's payment obligations under the standby letter of credit will at all times rank at least equally with all of its other present and future unsecured and unsubordinated obligations.

The issuer of the bonds is a special purpose vehicle established in the British Virgin Islands, and is wholly owned by China COSCO Holdings Company Limited.

BOC is headquartered in Beijing. As of 30 September, 2012, BOC's assets totaled RMB12.7 trillion.

RATING METHODOLOGY

Moody's analysis of the transaction is based primarily on the unsecured and unsubordinated obligations of BOC to support the payment of the bonds through the standby letter of credit. As such, the rating of the bonds is directly linked to the senior unsecured debt rating of BOC. Accordingly, any change in such rating of BOC could cause a corresponding change to the rating of the bonds.

Other factors used in this rating are described in "Moody's Identifies Core Principles of Guarantees for Credit Substitution" published in November 2010 and "Letter of Credit Supported Transactions" published in August 2005.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The rating has been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.

Information sources used to prepare the rating are the following: parties involved in the ratings, and public information.

Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO's major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody's Corporation; however, Moody's has not independently verified this matter.

Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Joe Wong
Asst Vice President - Analyst
Structured Finance Group
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077

Jerome Cheng
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077

Releasing Office:
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077

Press release distributed by Pressat on behalf of Falcon PR, on Monday 3 December, 2012. For more information visit http://www.pressat.co.uk/


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