Fitch rates Shandong Yuhuang notes B

Fitch Ratings said it assigned a long-term issuer default rating of B to Shandong Yuhuang Chemical Co., Ltd. with a positive outlook.

Fitch also said it assigned an expected B rating to Yuhuang's proposed senior unsecured dollar-denominated notes.

The notes will be issued by its offshore special purpose vehicle, Rock International Investment Inc., and guaranteed by Yuhuang, Fitch said.

The ratings reflect Yuhuang's track record of stable margins for its China operations, vertical integration, the agency said, along with its strategic cooperation with national oil companies.

The ratings also consider the financing and execution risks for its U.S. methanol project, which is a large investment for Yuhuang, Fitch said. This could result in pressure on its credit profile during construction, the agency said.

The company also is vulnerable to future price volatility of raw materials and end-products in China, Fitch added.

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