[ET Net News Agency, 29 June 2016] S&P Global Ratings said today that it had assigned
its 'BB+' long-term corporate credit rating to Beijing Capital Land Ltd. (BCL)(02868). The
outlook is negative. At the same time, the agency assigned its 'cnBBB' long-term Greater
China regional scale rating to the company.
BCL is a midsize property developer and the real estate development arm of Beijing
Capital Group Co. Ltd. (BCG; BBB-/Negative/--; cnBBB+/--), a Beijing government-owned
conglomerate. BCL reshaped its strategy in recent years to focus on five core markets in
Beijing, Tianjin, Shanghai, Chongqing, and Chengdu.
S&P said its rating on BCL is underpinned by the group credit profile of its parent BCG.
Given that it assesses BCL as a highly strategic subsidiary of BCG, the corporate credit
rating on BCL is one notch below that on its parent. The rating and outlook on BCL would
also move in tandem with those on BCG."
The credit rating agency believes BCG's strong support indicates BCL's importance to the
group, which cements S&P's view that BCL is a highly strategic subsidiary of BCG. BCL is
one of the two most important subsidiaries of BCG, and undertakes one of the group's most
profitable businesses--real estate development. Its importance also comes from its
significant role to support the group's revenues and earnings.
S&P estimated that BCL will continue to make a significant 40%-50% contribution to BCG's
EBITDA in 2016-2017. BCG also increased its shareholding in BCL in August 2015 to 54.5%,
from 32%. (KL)
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