[ET Net News Agency, 29 August 2014] Moody's Investors Service said that Country Garden
Holdings Company Limited's (Ba2, stable)(03383) proposed rights issue is credit positive
but has no immediate rating impact.
This is the first major rights issue/share placement from a domestic property developer
in Moody's-rated portfolio since January 2013.
Country Garden has proposed a rights issue that is expected to raise around HK$3.18
billion, with the net proceeds estimated to be around HK$3.15 billion. The company intends
to apply all of the net proceeds to refinance its existing indebtedness and as general
The rights issue is expected to be finalized on 15 October 2014.
"Country Garden's proposed rights issue is credit positive as it will lower its
leverage, which is in line with the company's deleveraging plans," said Franco Leung, a
Moody's Vice President and Senior Analyst.
"Although the expected improvements to its credit metrics are only marginal, this rights
issue shows that the company actively explores different funding channels other than debt
financing, and this will strengthen its access to its various funding channels," Leung
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