Fitch trims eHI Car

Fitch Ratings said it downgraded eHi Car Services Ltd.'s long-term issuer default rating to CCC+ from B-. The agency also lowered eHi's senior unsecured rating to CCC+ from B- with an RR4 recovery rating and removed them from rating watch negative.

“The downgrade is driven by a lack of evidence of refinancing progress for eHi's U.S. dollar bond due in November 2024 since Fitch's last rating action in December 2023. The rating reflects the potential for limited refinancing options as the bond maturity nears. Its relatively large maturing debt combined with the low liquidity headroom requires a combination of funding sources for repayment or refinancing, including vehicle disposals,” Fitch said in a statement.

The company’s $450 million of 7¾% senior unsecured notes on due on Nov. 14. The next maturity is its $300 million of 7% notes due Sept. 21, 2026.

“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. Further weakening in liquidity as well as uncertainty over its ability to repay the U.S. dollar bond could lead to negative rating action,” the agency said.

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