Hong Kong, March 02, 2021 -- Moody's Investors Service has assigned a Baa3 long-term backed
senior secured debt rating to the notes to be issued by Landmark Funding
2020 Limited. The notes are backed by the loan facility made by
Landmark Funding 2020 Limited to Minsheng Hong Kong International Leasing
Limited that is unconditionally and irrevocably guaranteed by Minsheng
Financial Leasing Co., Ltd (Baa3 stable).
The entity-level outlook on Landmark Funding 2020 Limited is stable.
RATINGS RATIONALE
The Baa3 long-term backed senior secured rating for the notes to
be issued by Landmark Funding 2020 Limited is in line with Minsheng Financial
Leasing's Baa3 issuer rating and reflects the structure of the notes.
Landmark Funding 2020 Limited was incorporated in the Cayman Islands on
24 September 2020 as a special purpose vehicle (SPV). The notes
are backed by a loan facility made by Landmark Funding 2020 Limited to
Minsheng Hong Kong International Leasing Limited, an entity indirectly
fully owned by Minsheng Financial Leasing. The payment obligations
of Minsheng Hong Kong International Leasing Limited under the loan facility
are unconditionally and irrevocably guaranteed by Minsheng Financial Leasing.
On the date the notes are issued, Landmark Funding 2020 Limited
will apply the proceeds of the issuance as a loan to Minsheng Hong Kong
International Leasing Limited under a facility agreement. The principal
and interest payable by Minsheng Hong Kong International Leasing Limited
under the facility agreement will correspond to the principal and interest
payable by Landmark Funding 2020 Limited under the notes.
Minsheng Financial Leasing irrevocably and unconditionally guarantees
the punctual payment by Minsheng Hong Kong International Leasing Limited
of all its obligations under the facility agreement. The obligations
under the guarantee rank at least pari passu with the claims of all of
Minsheng Financial Leasing's other unsecured and unsubordinated creditors,
except for obligations mandatorily preferred by law.
Although the structure of the notes is complex and different from a typical
bond issued with a guarantee, Moody's assesses that the difference
is not material enough to merit a downward rating adjustment.
In March 2019, Moody's assigned a Baa3 long-term backed
senior secured rating to notes that used a similar structure and were
issued by Landmark Funding 2019 Limited, another SPV incorporated
in the Cayman Islands.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
What Could Change the Rating - Up
The rating for the notes is underpinned by Minsheng Financial Leasing's
repayment obligations under the guarantee. Consequently,
the factors that can cause Minsheng Financial Leasing's ratings to be
upgraded will also drive the rating for the notes.
Minsheng Financial Leasing's ratings could be upgraded if Moody's
assesses that there is a material enhancement in the ability of its parent,
China Minsheng Banking Corp., Ltd. (Minsheng Bank),
to provide support.
Minsheng Financial Leasing's standalone assessment could be raised,
if the company: (1) reduces tenor mismatches between its assets
and liabilities; (2) improves its asset quality by lowering its exposure
to cyclical sectors; and (3) enhances its profitability.
What Could Change the Rating -- Down
The factors that can cause Minsheng Financial Leasing's ratings to be
downgraded will also drive the rating for the notes.
Minsheng Financial Leasing's long-term issuer rating could be downgraded
if Minsheng Bank's ability and willingness to support the company
weaken, or Minsheng Bank's shareholding in the company decreases
to less than 50.1%.
Minsheng Financial Leasing's standalone assessment could be lowered if
its: (1) asset quality deteriorates; (2) liquidity and funding
profiles weaken; (3) borrower concentration further increases;
or (4) profitability declines significantly.
The principal methodology used in this rating was Finance Companies Methodology
published in November 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1187099.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
Minsheng Financial Leasing Co., Ltd is headquartered in Beijing.
It reported assets of RMB195.0 billion (USD27.6 billion)
as of 30 June 2020.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and
sensitivity analysis, see the sections Methodology Assumptions and
Sensitivity to Assumptions in the disclosure form. Moody's
Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of
debt or security this announcement provides certain regulatory disclosures
in relation to each rating of a subsequently issued bond or note of the
same series, category/class of debt, security or pursuant
to a program for which the ratings are derived exclusively from existing
ratings in accordance with Moody's rating practices. For ratings
issued on a support provider, this announcement provides certain
regulatory disclosures in relation to the credit rating action on the
support provider and in relation to each particular credit rating action
for securities that derive their credit ratings from the support provider's
credit rating. For provisional ratings, this announcement
provides certain regulatory disclosures in relation to the provisional
rating assigned, and in relation to a definitive rating that may
be assigned subsequent to the final issuance of the debt, in each
case where the transaction structure and terms have not changed prior
to the assignment of the definitive rating in a manner that would have
affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this credit rating action,
and whose ratings may change as a result of this credit rating action,
the associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
The rating has been disclosed to the rated entity or its designated agent(s)
and issued with no amendment resulting from that disclosure.
This rating is solicited. Please refer to Moody's Policy
for Designating and Assigning Unsolicited Credit Ratings available on
its website www.moodys.com.
Moody's considers a rated entity or its agent(s) to be participating
when it maintains an overall relationship with Moody's. Unless
noted in the Regulatory Disclosures as a Non-Participating Entity,
the rated entity is participating and the rated entity or its agent(s)
generally provides Moody's with information for the purposes of
its ratings process. Please refer to www.moodys.com
for the Regulatory Disclosures for each credit rating action under the
ratings tab on the issuer/entity page and for details of Moody's
Policy for Designating Non-Participating Rated Entities.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social
and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed
by Moody's Deutschland GmbH, An der Welle 5, Frankfurt
am Main 60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's
office that issued the credit rating is available on www.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the UK and is endorsed
by Moody's Investors Service Limited, One Canada Square,
Canary Wharf, London E14 5FA under the law applicable to credit
rating agencies in the UK. Further information on the UK endorsement
status and on the Moody's office that issued the credit rating is
available on www.moodys.com.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
The first name below is the lead rating analyst for this Credit Rating
and the last name below is the person primarily responsible for approving
this Credit Rating.
David Yin
Vice President - Senior Analyst
Financial Institutions Group
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Sophia Lee, CFA
Associate Managing Director
Financial Institutions Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
