Wanda's IPO credit positive: Moody's

Moody's Investors Service said that Dalian Wanda Commercial Properties Co., Ltd.'s (DWCP) initial public offering (IPO) is credit positive, as it will enhance the company's liquidity and capital structure.

The Moody's report came days after DWCP published its global offering prospectus and IPO timetable on Dec. 10.

DWCP, one of the largest property companies in China, develops, operates and sells integrated properties, including shopping malls, offices, residential housing, and hotels.

Through the IPO, the company plans to raise 25-29.8 billion Hong Kong dollars by issuing 600 million shares at a price of 41.8-49.6 Hong Kong dollars per share. The company may issue an additional 90 million shares by exercising its over-allotment option.

DWCP is expected to start trading on the Hong Kong Stock Exchange on Dec. 23, 2014.

The IPO will also improve the company's credit profile, therefore supporting its Baa2 issuer rating and stable outlook, Moody's said in a note to media.

"If DWCP's IPO is successful, it will enhance its equity base and capital structure," the report quoted Kaven Tsang, a Moody's vice president and senior analyst, as saying

"In addition, DWCP's IPO will expand its investor base and enhance its already strong liquidity position for the purpose of business growth," added Tsang, also the lead analyst of DWCP.

A successful listing would also enhance corporate governance, including controls over related-party transactions, increased transparency, and timely disclosure of financial results in accordance with the listing requirements.

DWCP's current Baa2 issuer rating is based on the company's prudent pre-IPO dividend policy, which pays out 20 percent of net profits. Any material change could impact its current rating, said the Moody's report.