Fitch upgrades Yanzhou Coal

Fitch Ratings said it upgraded Yanzhou Coal Mining Co. Ltd.'s long-term foreign-currency issuer default rating to BB- from B+.

The outlook is stable.

Fitch also said it upgraded Yanzhou Coal's senior unsecured rating to BB- from B+ with recovery rating of RR4.

The upgrades were driven by improvement in the consolidated credit profile of Yanzhou's immediate parent, Yankuang Group., Ltd., as cash flow from operations has turned positive since 2017, the agency said.

Fitch also said it assessed Yankuang Group's consolidated credit profile using a bottom-up approach from its standalone credit profile that reflects potential support from its ultimate parent, Shandong State-owned Assets Supervision and Administration Commission (Sasac).

Yankuang Group's relationship with Shandong SASAC is reflected in its position as one of the Chinese province's two key provincial coal suppliers, the second-largest employer and fourth-largest domestic bond issuer, the agency said.

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