Moody's lowers Xinao to negative

Moody's Investors Service said it has changed the outlook for Xinao Gas Holdings' Ba1 corporate family rating and senior unsecured bond rating to negative from stable.

Moody's said the change follows Xinao's announcement of full-year results for the fiscal year ended Dec. 31 and reflects Moody's concerns over the company's ability to achieve its projected financial performance.

Currently, Moody's said the ratings reflect Xinao's geographically diversified piped gas operations, in which it enjoys monopoly positions; its experienced management; established track record in securing and managing piped gas projects; favorable industry trends in China, and a supportive government policy that promotes clean energy sources.

However, the ratings agency also noted Xinao's exposure to China's evolving regulatory and operating environments, challenges in implementing strategies to increase piped gas penetration, as well as its large capex requirements and resultant negative free cash flow position, which limits its financial flexibility. A rating upgrade is unlikely in the next 12 months.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.