Fitch Ratings has given an A(EXP) expected rating to Bocom Leasing Management Hong Kong's proposed senior unsecured US dollar notes, which will be issued under its $10 billion medium-term note program.
The expected rating is equivalent to the leasing platform's A long-term issuer default rating, Fitch said in a Sunday release.
Bocom Leasing Management Hong Kong is an overseas platform of Bank of Communications Financial Leasing, which in turn is Bank of Communications' (HKG:3328, SHA:601328) wholly owned leasing subsidiary in China.
The proposed notes will gain from Bank of Communications Financial Leasing's keep-well and asset purchase deed, which Fitch views as proof of the company's solid support capacity for Bocom Leasing Management Hong Kong.
However, Fitch said the deed is not as strong as a guarantee, which could present challenges for its enforcement.
A negative rating action will depend on a severe weakening of the recovery prospects of Bocom Leasing Management Hong Kong's bonds or shifts that lead to challenges for Bank of Communications Financial Leasing's exercise of the keepwell and asset purchase deeds or provision of support to its overseas platform.
Meanwhile, a positive rating action is unlikely unless Fitch positively changes its view of the ratings on the sovereign and Bank of Communications.
The leasing platform will list the proposed notes on the Hong Kong Stock Exchange and the Luxemburg Stock Exchange, with proceeds to be channeled to eligible green projects.
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