S&P cuts Yingde Gases, notes

S&P said it lowered its long-term corporate credit rating on Yingde Gases Group Co. Ltd. to CCC- from B-.

The agency also downgraded the issue rating on the outstanding senior unsecured notes that Yingde guarantees to CC from CCC+. It lowered the long-term Greater China regional scale rating on Yingde to cnCCC- from cnB-, and on the notes to cnCC from cnCCC+.

All ratings remain on CreditWatch, where they were first placed with negative implications on Dec. 15.

S&P said the downgrade reflects its view of an increased likelihood that Yingde will not make a timely payment of its HK$820 million offshore bank loan due Jan. 3, 2017, if it fails to secure new funding alternatives.

"A failure to repay the loan could trigger a cross-default of the company's other financial obligations, including an acceleration in payment of its outstanding U.S. dollar notes," S&P analyst Danny Huang said in a news release.

The agency kept the ratings on CreditWatch with negative implications to reflect the imminent liquidity risk.

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