Qingdao Conson Development (Group) Assigned 'BBB' Rating With Stable Outlook; Proposed Guaranteed Notes Rated 'BBB'

We see an extremely high likelihood of extraordinary support from the Qingdao municipal government to Qingdao Conson, a local government-owned platform with a focus on financing and constructing major infrastructure facilities in the city. Partially offsetting the high level of government support is Qingdao Conson's weak stand-alone credit profile, which we assess as 'b'. This reflects the company's very high financial leverage, meager cash flow generation, significant capital expenditure plans, and its business geographic concentration. We are assigning our 'BBB' long-term corporate credit rating to Qingdao Conson. We are also assigning our 'BBB' long-term issue rating to the senior unsecured notes guaranteed by the company. The stable outlook reflects our view of the credit profile of the Qingdao municipal government

...+ We see an extremely high likelihood of extraordinary support from the Qingdao municipal government to Qingdao Conson, a local government-owned platform with a focus on financing and constructing major infrastructure facilities in the city. + Partially offsetting the high level of government support is Qingdao Conson's weak stand-alone credit profile, which we assess as 'b'. This reflects the company's very high financial leverage, meager cash flow generation, significant capital expenditure plans, and its business geographic concentration. + We are assigning our '###' long-term corporate credit rating to Qingdao Conson. We are also assigning our '###' long-term issue rating to the senior unsecured notes guaranteed by the company. + The stable outlook reflects our view of the credit profile of the Qingdao municipal government for the next 24 months. It also reflects our expectation that Qingdao Conson will continue to receive extremely high extraordinary government support over the period....

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