S&P lowers Yida China

S&P said it lowered the long-term issuer credit rating on Yida China Holdings Ltd. to CCC+ from B-, along with the long-term issue rating on the company's senior unsecured notes to CCC from CCC+.

The agency said it downgraded Yida because it believes the company's capital structure is unsustainable in the longer run.

Yida has a small cash balance and sizable short-term debt maturities, S&P said.

Although the company has rolled over some debt over the past six months, its liquidity is likely to remain very tight, the agency said.

The outlook is negative.

The agency said it believes Yida will continue to rely heavily on refinancing to address its near-term debt maturities, leaving little room for error, S&P said.

The company's borrowings of about RMB 6.2 billion will be due in 2019.

The negative outlook on Yida reflects a view that the company may face increasing refinancing challenges, although they are unlikely in the next 12 months, S&P said.

The company's strategy to expand outside of its main footprint may allow it to boost sales from more projects, but it also brings significant execution risk because the company has limited experience in markets outside of Dalian, the agency explained.

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