LEVC Finance Ltd — Moody’s assigns (P)A1 to LEVC Finance Ltd’s credit enhanced bonds


Rating Action: Moody’s assigns (P)A1 to LEVC Finance Ltd’s credit enhanced bondsGlobal Credit Research – 18 Mar 2021Hong Kong, March 18, 2021 — Moody’s Investors Service has assigned a provisional (P)A1 rating to the credit enhanced bonds to be issued by LEVC Finance Ltd.The bonds will be supported by an irrevocable standby letter of credit from Bank of China Limited, Singapore Branch (the LC bank), which has been assigned a long-term Counterparty Risk (CR) Assessment of A1(cr).Issuer: LEVC Finance Ltd….USD[.] [.] per cent. Credit Enhanced Bonds due 20[.], assigned (P)A1RATINGS RATIONALEThe (P)A1 rating of the bonds is based on the CR Assessment of the LC bank. The bonds will be fully supported by an irrevocable USD-denominated SBLC which is an unsecured and unsubordinated obligation of the LC bank.The payment obligations of the LC bank under the SBLC will at all times rank at least equal to all of its other present and future unsecured and unsubordinated obligations.The issuer may from time to time create and issue further bonds provided that certain conditions have been met, including that such bonds are supported by an irrevocable letter of credit issued by the LC bank. The terms of the irrevocable letter of credit of the new bonds have to be substantially similar to those of the SBLC.The issuer is not rated and is a limited liability company incorporated in British Virgin Islands. It is an indirect wholly-owned subsidiary of Zhejiang Geely Holding Group Company Limited, which is not rated by Moody’s.Bank of China Limited is headquartered in Beijing. It reported total assets totaling RMB24.15 trillion as of 30 June, 2020.Moody’s analysis of the transaction is based primarily on the unsecured and unsubordinated obligations of the LC bank to support the payment of the bonds through the SBLC.DB Trustees (Hong Kong) Limited is the trustee, Deutsche Bank AG, Hong Kong Branch is the principal paying agent, the pre-funding account bank and the LC proceeds account bank of the bonds.The principal methodology used in this rating was « Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts » published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING:Any change to the long-term CR Assessment of the LC bank could lead to a corresponding change in the rating of the bonds.REGULATORY DISCLOSURESFor 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.Moody’s did not use any stress scenario simulations in its analysis.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. 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