Fitch: Yingde Gases on positive watch

Fitch Ratings has placed Yingde Gases Group Co. Ltd.’s long-term issuer default rating of B+ on Rating Watch positive.

The company’s senior unsecured rating of B+ with recovery rating of RR4 also was placed on positive watch.

Also on positive watch includes the rating on the $425 million 8 1/8% senior notes due 2018 and $250 million 7¼% senior notes due 2020 issued by Yingde Gases Investment Ltd., which is wholly owned by Yingde.

The positive watch follows news that Yingde has agreed to issue new shares to water solution provider Originwater Hong Kong Environmental Protection Co., Ltd., a subsidiary of Beijing OriginWater Technology Co., Ltd.

The transaction, which will raise net proceeds of HK$1.2 billion, is subject to a number of approvals, Fitch said.

The proposed equity placement will immediately improve Yingde’s balance sheet, if the company sticks to its stated objective of using the proceeds to reduce debt and increase working capital, the agency said.

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