Fitch: Yingde Gases notes BB

Fitch Ratings said it assigned an expected rating of BB to Yingde Gases Group Co. Ltd.’s proposed dollar-denominated senior unsecured notes.

The notes will be issued by Yingde Gases Investment Ltd. and unconditionally and irrevocably guaranteed by Yingde.

The proceeds will be used for refinancing part of Yingde’s existing onshore debt, capital expenditures and working capital, Fitch said, and general corporate purposes.

Yingde’s on-site gas supply business, which accounted for 88% of revenue in 2013, generates stable cash flow similar to that seen in utility companies, the agency said.

This business benefits from the cost pass-through and minimum off-take mechanisms in the long-term contracts between Yingde and its on-site customers, Fitch said.

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