Fitch lowers Gangtai Group

Fitch Ratings said it downgraded Gangtai Group Co., Ltd.'s long-term foreign-currency issuer default rating to B- from B.

The agency also downgraded the senior unsecured rating and the rating on its $100 million 9¾% senior notes due 2019 to B- from B with a recovery rating of RR4.

All ratings were placed on rating watch negative.

The agency said the downgrade reflects a sharp deterioration in the liquidity position of Gansu Gangtai Holdings (Group) Co., Ltd., in which Gangtai Group owns 39%, due to increased working capital requirements and a high proportion of short-term debt.

The rating watch negative indicates the prospect for further negative action if the liquidity position of Gangtai Holdings further deteriorates and results in a default, Fitch said.

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