Fitch: Zoomlion bonds BBB-

Fitch Ratings said it assigned an expected BBB- rating to Zoomlion HK SPV Co., Ltd.'s proposed dollar-denominated senior unsecured bonds.

The bonds will be unconditionally and irrevocably guaranteed by Zoomlion Heavy Industry Science and Technology Co. Ltd. As a result, the bonds are rated at the same level as Zoomlion's senior unsecured rating of BBB-.

The proceeds will be used mainly for funding overseas expansion, including building a distribution and service network, research and development centers and manufacturing facilities, Fitch said.

The ratings are supported by the company's large scale, market leadership and strong profitability, the agency said.

The company is a market leader in China for its core products: concrete and crane machines, Fitch said.

The ratings are constrained by Zoomlion's exposure to the highly cyclical construction industry, lack of diversification outside of China and negative free cash flow generation, the agency added.

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