OREANDA-NEWS. Fitch Ratings has assigned Rail Transit International Investment Company Limited's (RTII) USD200m 2.50% senior unsecured note due 2019 and USD300m 2.875% senior unsecured note due 2021 final ratings at 'A'.

The assignment of the final ratings follows the receipt of documents conforming to information already received. The final ratings are in line with the expected ratings assigned on 25 April 2016. The bonds are unconditionally and irrevocably guaranteed by Tianjin Rail Transit Group (Hong Kong) Co., Limited (TRTHK), a wholly owned subsidiary of Tianjin Rail Transit Group Co., Ltd. (TRT, A/Stable). The bond proceeds will be used for general corporate purposes.

KEY RATING DRIVERS

In place of a guarantee, TRT has granted a keepwell and liquidity support deed and a deed of equity interest purchase undertaking to ensure TRTHK has sufficient assets and liquidity to meet its obligations under the guarantee for the US dollar bonds, which will be TRT's first issuance of offshore debt.

The bonds are rated at the same level as TRT's Issuer Default Ratings due to the strong linkage between TRTHK and TRT and because the keepwell and liquidity support deed and deed of equity interest purchase undertaking transfer the ultimate responsibility of payment to TRT.

In Fitch's opinion, the keepwell and liquidity support deed and the deed of equity interest purchase undertaking all signal a strong intention from TRT to ensure that TRTHK has sufficient funds to honour its debt obligations.

TRT's ratings are credit linked to those of Tianjin Municipality, a coastal city adjacent to China's capital, Beijing. The link reflects strong oversight and supervision of TRT by the Tianjin municipal government, the multi-year integration of TRT's funding needs in the municipal budget and the strategic importance of TRT's rail transit development and operations to the city.

RATING SENSITIVITIES

Any rating action on TRT will result in a similar rating action on the rated bonds issued by RTII.

An upgrade of Fitch's credit view on Tianjin Municipality may trigger positive rating action on TRT.

Significant changes to TRT's strategic importance, dilution in the municipality's shareholding, or reduced explicit and implicit municipality support, could lead to a wider rating gap between TRT and Tianjin Municipality. An upgrade of Fitch's internal credit view on Tianjin Municipality may trigger a positive rating action on TRT. A weaker fiscal performance or higher indebtedness of the municipality could lead to a lowering of Fitch's internal assessment of Tianjin's creditworthiness and thus may trigger a negative rating action on TRT.