S&P: China National Bluestar (Group) Co. Ltd. 's Proposed Senior Guaranteed Notes Assigned 'BBB' And 'cnA' Ratings
The rating on the notes is the same as the corporate credit rating on Bluestar because the company unconditionally and irrevocably guarantees the notes. Although Bluestar's ratio of priority claims to total assets could exceed our 20% notching threshold, the company's diverse businesses and operating assets at the parent level temper the structural subordination risk associated with the indebtedness at the holding company level, in our view.
The stable outlook on the corporate credit rating on Bluestar reflects our view that the company's parent China National Chemical Corp. (ChemChina) will maintain its group credit profile and that Bluestar will remain ChemChina's core subsidiary over the next two years.
We have not factored ChemChina's proposed acquisition of Syngenta AG (A+/Watch Neg/A-1) into our rating on Bluestar because the deal is pending approvals from various countries. In our view, the acquisition, once completed, may have multiple implications on the corporate credit rating on Bluestar. The key areas we will assess include: (1) the impact on ChemChina's business profile; (2) the financing arrangement of the acquisition and its impact on ChemChina's capital structure; (3) ChemChina's role to the Chinese government post the transaction; and (4) Bluestar's status within the ChemChina group.