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CIFI Holdings (Group) Co. Ltd.’s Proposed U.S. Dollar Senior Unsecured Notes Assigned ‘B+’ Rating

          HONG KONG (S&P Global Ratings) April 12, 2018--S&P Global Ratings today said it has assigned its 'B+' long-term issue rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by CIFI Holdings (Group) Co. Ltd. (CIFI; BB-/Positive/--). The issue rating is subject to our review of the final issuance documentation. 
          We rate the senior unsecured notes one notch lower than the issuer credit rating because of subordination risk. The proposed notes will rank behind a material amount of secured debt and subsidiary level debt in CIFI's capital structure. As of Dec. 31, 2017, the company had around Chinese renminbi (RMB) 24.5 billion in secured borrowings and RMB 9.6 billion in unsecured debt at the subsidiary level, which was around 63% of total reported debt. 
          We expect CIFI to use the note proceeds predominantly to refinance existing debt, including the early redemption of its outstanding US$400 million senior notes (7.75% coupon and due 2020) after June this year. In our view, this will strengthen the company's debt maturity profile and help control its average funding costs. 
          The positive outlook reflects our view that CIFI will continue to expand in scale and diversity, advance its market position, and become a developer with a national presence. We forecast that the company will rapidly grow its sales and revenue in the next two years, while maintaining stable profitability and financial leverage.