Fitch rates XETZ notes BB+

Fitch Ratings said it assigned long-term foreign- and local-currency issuer default ratings of BB+ to Xuzhou Economic and Technology Development Zone State-owned Assets Management Co., Ltd. (XETZ).

The outlook is stable.

Fitch also said it assigned an expected rating of BB+ to XETZ’s proposed senior unsecured dollar-denominated notes.

The offshore notes will be issued by Xuzhou Economic and Technology Development Zone International Investment Co., Ltd., which is a direct, wholly owned subsidiary of XETZ.

XETZ will provide an unconditional and irrevocable guarantee to the proposed notes, the agency said.

The proceeds will be used for general corporate purposes, Fitch said.

The ratings on XETZ’s are credit linked, but not equalized with the Xuzhou municipality, the agency said.

This is reflected in 100% state ownership, strong government control and oversight and strategic importance of the entity’s operation to the municipality, Fitch said.

These factors result in a high likelihood of extraordinary support, if needed, from the municipality, the agency said.

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