Fitch puts eHi Car on watch

Fitch Ratings said it placed eHi Car Services Ltd.'s long-term issuer default rating and senior unsecured rating on Rating Watch negative, reflecting the uncertainity of the company's plans to refinance or repay its $200 million bonds due this December.

eHi's ratings reflect the company's leverage and market position, Fitch said, as well as uncertainity about the industry's regulatory environment.

The company's notes need to be refinanced as its current cash on hand is insufficient to repay the maturing bond, the agency explained.

The company is arranging a syndicated facility to refinance the maturing bond and aims to complete the process by late November, Fitch added.

eHi's leverage has risen sharply in the previous two years due to ongoing capital expenditure for vehicle-fleet expansion, the agency noted.

China's car rental and services market continues to change rapidly and eHi faces fierce competition from peers, which may pressure profitability, Fitch said.

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