Fitch affirms Shangrao City Construction

Fitch Ratings said it affirmed Shangrao City Construction Investment Development Group Co., Ltd.'s long-term foreign and local currency issuer default ratings of BB+ with a stable outlook.

The agency also affirmed the rating on its $300 million senior unsecured bonds due 2020 at BB+.

Fitch said it expects the local government's development and investment plan to be a catalyst for the company’s revenue growth as the majority of the company's revenue is associated with public works.

Under the company’s legal status, the local government does not bear the ultimate liability for its debt if it defaults.

Nevertheless, de facto government ownership and the government's significant influence on the overall operation of the company reinforce an expectation that the government has a high propensity to extend support, Fitch said.

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