Fitch rates Winsway, notes BB

Fitch Ratings said it assigned Winsway Coking Coal Holdings Ltd. a long-term foreign-currency issuer default rating of BB and a foreign-currency senior unsecured rating of BB, along with a BB rating to its proposed senior notes.

The proceeds will be used to purchase rolling stock, build railway-related infrastructure to increase transportation capacity and to finance investments in upstream coal resources, Fitch said.

The ratings are supported by its unique business model and solid market position as a virtual monopoly in the transportation of Mongolian coal into China, the agency said.

The ratings are constrained by its relatively small operating scale, which puts it in line with the size of other Chinese industrial corporations in the BB category. Furthermore, Fitch said it expects negative free cash flow from 2011 to 2013 due to increasing capital expenditure.

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