Moody's rates Yingde notes Ba3

Moody's Investors Service said it assigned a Ba2 corporate family rating to Yingde Gases Group Co. Ltd. and a Ba3 senior rating to the proposed dollar-denominated notes to be issued by Yingde Gases Investment Ltd. The notes will be guaranteed by Yingde Gases Group. The outlook is stable.

The proceeds of the notes will be used to repay some existing borrowings and for general corporate purposes.

The agency said the Ba2 corporate family rating is supported by the company's strong market position in the industrial gas supply market in China and the strong growth opportunities in this sector; by Yingde Gases' competitive advantages, including its familiarity with local markets and its low-cost basis when compared with its international peers; and by its defensive and resilient business profile, which is, at the same time, typical for the industrial gas sector.

Moody's said Yingde Gases' Ba2 rating is constrained by the company's relatively small business scale, customer concentration and fast growth, which means the company has a short track record for its current scale and has large capital expenditure requirements.

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