Fitch upgrades Shenzhen International

Fitch Ratings said it upgraded Shenzhen International Holdings Ltd.'s (SZIH) long-term issuer default rating to BBB+ from BBB and removed the ratings from under criteria observation.

The upgrade reflects the application of updated parent and subsidiary linkage rating criteria on SZIH's IDR, which was placed on UCO following the publication of the updated criteria on Dec. 1, the agency said.

“SZIH's IDR incorporates a two-notch uplift from its underlying credit profile. This reflects 'medium' operational and strategic ties between SZIH and its holding company, Shenzhen Investment Holdings Co., Ltd. (SIHC, A+/stable), as assessed under the updated parent and subsidiary linkage rating criteria,” Fitch said in a press release.

The outlook is negative, which mirrors the estimate of limited rating headroom as forecasted net leverage will be elevated due to SZIH's largely debt-funded expansion and acquisitions, the agency noted.

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