Chaoda Modern (00682) rating raised to "BB" - S&P

  <ET Net News Agency, 14 December 2010>  Standard & Poor's Ratings Services said it had
raised its long-term corporate credit rating on Chaoda Modern Agriculture (Holdings) Ltd.
(00682) to 'BB' from 'BB-'. The outlook is stable.
  "We raised our rating on Chaoda to reflect the company's strong credit metrics and
improved liquidity and financial flexibility. The company repaid its HK$1.34 billion
convertible bond in May 2009 and US$225 million senior notes in February 2010. We believe
the company has good flexibility to increase leverage to fund its business plan. In our
view, its credit metrics will continue to be supportive of a 'BB' rating after factoring
in a potential substantial increase in debt-funded capital spending. Chaoda's good and
stable profitability is also a supporting rating factor," said S&P's credit analyst Frank
Lu.
  "In our opinion, Chaoda's credit metrics are strong for a 'BB'-rated company due to its
low borrowings. As at June 30, 2010, the company had an adjusted debt-to-EBITDA ratio of
0.4x and EBITDA interest coverage of 19.4x. We expect these credit ratios to weaken but
remain supportive of a 'BB' rating. We factored in a recent US$200 million convertible
bond issue and a potential substantial increase in borrowings to fund expansion." the
agency added.