Rating Action: Moody's assigns (P)A1 to BOSCI's credit enhanced bonds
Global Credit Research - 01 Sep 2020
Hong Kong, September 01, 2020 -- Moody's Investors Service has assigned a provisional (P)A1 rating to the credit enhanced bonds to be issued by BOSCI (BVI) Limited.
The bonds will be supported by an irrevocable standby letter of credit (SBLC) from China Construction Bank Corporation, Hong Kong Branch (the LC bank), which has been assigned a long-term Counterparty Risk (CR) Assessment of A1(cr).
Issuer: BOSCI (BVI) Limited
.... USD[] [] per cent. Credit Enhanced Bonds due 20[], assigned (P)A1
RATINGS RATIONALE
The (P)A1 rating of the bonds is based on the CR Assessment of the LC bank. The bonds are fully supported by an irrevocable USD-denominated SBLC which is an unsecured and unsubordinated obligation of the LC bank.
The payment obligations of the LC bank under the SBLC will at all times rank at least equal to all of its other present and future unsecured and unsubordinated obligations.
The issuer may from time to time create and issue further bonds provided that certain conditions have been met, including that such bonds are supported by an irrevocable letter of credit issued by the LC bank. The terms of the irrevocable letter of credit of the new bonds have to be substantially similar to those of the SBLC.
The issuer is not rated and is an indirect subsidiary of Bank of Shanghai Co., Ltd., to which Moody's has assigned Baa2 issuer and deposit ratings.
China Construction Bank Corporation, the head office of the LC bank, reported assets of RMB25.4 trillion as of 31 December 2019.
Citicorp International Limited is the trustee. Citibank N.A., London Branch is the principal paying agent, transfer agent and registrar. Citibank N.A., Hong Kong Branch is the LC proceeds account bank and pre-funding account bank.
The principal methodology used in this rating was "Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts" published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING:
Any change to the long-term CR Assessment of the LC bank could lead to a corresponding change in the rating of the bonds.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
Moody's did not use any stress scenario simulations in its analysis.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security 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 certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain 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.
For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.
The rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.
This rating is solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.
Moody's considers a rated entity or its agent(s) to be participating when it maintains an overall relationship with Moody's. Unless noted in the Regulatory Disclosures as a Non-Participating Entity, the rated entity is participating and the rated entity or its agent(s) generally provides Moody's with information for the purposes of its ratings process. Please refer to www.moodys.com for the Regulatory Disclosures for each credit rating action under the ratings tab on the issuer/entity page and for details of Moody's Policy for Designating Non-Participating Rated Entities.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, 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 issued the credit rating is available on www.moodys.com.
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.
Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.
The first name below is the lead rating analyst for this Credit Rating and the last name below is the person primarily responsible for approving this Credit Rating.
Cecilia Chen 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 Client Service: 852 3551 3077 Jerome Cheng Associate Managing Director Structured Finance Group JOURNALISTS: 852 3758 1350 Client Service: 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 Client Service: 852 3551 3077
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