Fitch pares eHi CarServices

Fitch Ratings said it lowered its ratings for eHi Car Services Ltd. and its senior unsecured ratings to B- from B. The recovery rating on the debt is RR4.

The ratings remain on rating watch negative, where they were placed on Nov. 15.

“The downgrade is driven by the heightened refinancing risk for eHi's 2024 U.S. dollar bond due in November 2024 relative to its currently available liquidity. Fitch believes eHi's operating cash flow can be sustained under the current favorable operating conditions, but its capital structure and liquidity buffer have deteriorated due to its sustained high capex and fleet expansion,” the agency said in a press release. The bonds are due Nov. 14, 2024.

The company began buying back the bonds earlier this year but $381.5 million of notes remains outstanding. As of Sept. 30, eHi had CNY 406 million in available cash or roughly $57 million.

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