S&P puts eHi Car on negative watch

S&P said it placed the BB long-term issuer credit rating on eHi Car Services Ltd. on CreditWatch with negative implications.

The agency also said it placed the BB long-term issue rating on the company's outstanding dollar-denominated senior unsecured notes on CreditWatch with negative implications.

The CreditWatch placement reflects the possibility that eHi's debt leverage and financial policy could become more aggressive following its privatization, S&P said.

The company may also face some refinancing risk if the proposed transaction structure is altered in a meaningful way, the agency said.

On April 6, eHi announced that it had entered into a merger agreement with a holding company fully owned by a consortium of new shareholders and certain existing shareholders, S&P said.

The consortium has offered to acquire the remaining stake in eHi at $6.75 per common share, the agency added.

The transaction is scheduled to be closed by the third quarter of 2018, but is still subject to approvals by regulators and shareholders, S&P said.

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