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Moody’s drops PowerChina to Baa1
Moody's Investors Service said it downgraded the issuer rating of Power Construction Corp. of China (PowerChina) to Baa1 from A3.
At the same time, the agency downgraded the senior guaranteed perpetual securities issued by Dianjian Haixing Ltd. and guaranteed by PowerChina to Baa1 from A3.
The outlook is stable. This action concludes the review for downgrade initiated on June 30.
Moody’s said the downgrade reflects PowerChina's high financial leverage – as measured by adjusted debt/EBITDA – of 8 times in FY2015, up substantially from 6.4 times in FY2014, and Moody's expectation that leverage will remain elevated at around 7 times in the next two years.
The agency’s expectation is based on the company's projected expanding investment in power projects, real estate development and build-transfer (BT)/build-operate-transfer (BOT) projects.
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