Moody’s lowers Yingde Gases

Moody's Investors Service said it downgraded Yingde Gases Group Co. Ltd.'s corporate family rating to B2 from B1.

Moody's also said it downgraded the senior unsecured rating on the bonds issued by Yingde Gases Investment Ltd., and guaranteed by Yingde Gases, to B3 from B2.

The agency also said it placed the company’s B2 corporate family rating and B3 senior unsecured rating on review for further downgrade.

The downgrades and review reflect concerns over the company’s heightened level of liquidity risk as caused by the delay in its new share issuance, which is designed to address the company's offshore funding needs, Moody’s said.

This development adds uncertainty over the future of the issuance, the agency said.

A planned transaction with Originwater Hong Kong Environmental Protection could be terminated if the issuance does not take place before that date which falls six months after Nov. 5, 2016, Moody’s explained.

The company's cash balance also was insufficient to cover its short-term debt, the agency said. If the new shares are not issued, the company could be short of the offshore funds needed to address its funding needs, Moody’s said.

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