S&P: Grants New City Development (01030.HK) Long-Term Issue Rating of "B-" for Proposed USD Notes

Securities News: On February 26, Standard & Poor’s assigned a long-term issuance rating of “B-” to the senior unsecured notes denominated in US dollars issued by New Metro Global Ltd., a special purpose financing vehicle of Seazen Group Limited (Seazen Group, 01030.HK). Seazen will provide an unconditional and irrevocable guarantee for the notes. The issuance rating is subject to S&P’s review of the final offering documents.

Seazen plans to use the proceeds to fund the tender offer for its senior notes due May 2026, refinance existing debt, and for general corporate purposes. Additionally, the company will utilize internal funds to finance a concurrent tender offer for its senior notes due September 2027.

S&P’s bond rating for Seazen is one notch below its issuer credit rating (B/Negative/–), reflecting subordinate risk. As of June 30, 2025, the company’s capital structure includes RMB 48.3 billion in secured debt. Its reported total debt is approximately RMB 57.2 billion, with secured debt accounting for 84.4% of total debt, exceeding S&P’s 50% threshold for downgrading bond ratings. S&P expects that after repaying USD 390 million of senior unsecured bonds in the second half of 2025, this ratio will rise to between 85% and 90% by December 31, 2025.

The negative outlook on Seazen’s issuer credit rating reflects S&P’s view that, amid ongoing market downturns, the company’s contracted sales over the next 12 months may weaken. S&P also believes the company’s liquidity buffer could further narrow.

Nevertheless, S&P considers that Seazen’s sizable shopping mall portfolio will help maintain stable rental income. As of June 2025, Seazen owns approximately RMB 15 billion in unencumbered investment properties. The average loan-to-value ratio of mortgaged properties is about 42%.

Seazen has been raising funds by mortgaging its commercial properties, which will somewhat mitigate its refinancing risk. Its REIT channels, such as the private REIT issued in November 2025, may supplement the company’s recent liquidity.