S&P puts QPIG on watch

S&P said it placed the BB- long-term issuer credit rating on Qinghai Provincial Investment Group Co. Ltd. (QPIG) on CreditWatch with negative implications.

The agency also said it placed the BB- long-term issue rating on the company's outstanding dollar-denominated senior unsecured notes on CreditWatch with negative implications.

The negative watch reflect the increasing refinancing risks faced by the company for its two $300 million senior unsecured notes each due in September and December 2018, respectively.

QPIG has total short-term debt of RMB 19.56 billion due in the 12 months ending May 2019, including the two $300 million notes, S&P explained.

As one of the largest state-owned enterprises in Qinghai province, the company was able to roll over its bank borrowing smoothly so far this year, the agency said.

But the company still does not have a concrete, credible plan to refinance the two $300 million notes, S&P said.

While the agency said it believes QPIG should have enough financial resources to repay the notes due in September, it relies on market conditions to refinance the notes due in December.

The company's highly leveraged financial position is not expected to improve this year despite favorable operating conditions for aluminum producers, S&P added.

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