S&P keeps Datang on watch

Standard & Poor's said ratings on Datang International Power Generation Co. Ltd. will remain on CreditWatch with negative implications pending upcoming discussions with management.

The BBB- long-term corporate credit ratings and BBB- rating on senior unsecured notes were placed on watch April 16. The action followed the company's plans for several large projects, which would lead to greater-than-expected capital expenditure over the next two years, putting pressure on Datang Power's already highly leveraged financial profile, S&P said.

Datang Power's financial profile has further weakened as a result of persistent high fuel costs and insufficient recovery via power tariffs due to government-imposed caps, but the company has strategic importance as one of China's largest power generators, the agency said.

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