Fitch to rate Yanzhou securities BB

Fitch Ratings said it assigned Yanzhou Coal Mining Co. Ltd.'s proposed dollar-denominated perpetual capital securities an expected rating of BB(EXP).

The proposed perpetual securities are to be issued by Yancoal International Trading Co., Ltd. and guaranteed by Yancoal on a subordinated basis.

Fitch has assigned a 50% equity credit treatment to the securities, in line with the proposed terms and conditions, to reflect optional cumulative deferral of coupon payments.

Given the language on replacement intent in the proposed terms and conditions, Fitch said it does not consider 2038, when there will be a cumulative 100 basis point step-up in the coupon, as the effective maturity date of the proposed perpetual in assessing the equity credit.

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