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Moody’s cuts Shanghai Huayi, notes
Moody's Investors Service said it downgraded Shanghai Huayi (Group) Co.’s issuer rating to Baa3 from Baa2 and baseline credit assessment (BCA) to ba2 from ba1.
At the same time, the agency downgraded the rating on the senior unsecured notes issued by Huayi Finance I Ltd. to Ba1 from Baa3. The notes are irrevocably and unconditionally guaranteed by Huayi Group (Hong Kong) Ltd., a wholly owned subsidiary of Shanghai Huayi.
The notes benefit from a keepwell and liquidity support deed and a deed of equity interest purchase undertaking provided by Shanghai Huayi.
These actions conclude the review of Shanghai Huayi's ratings initiated on Nov. 11.
The outlook is negative.
"The downgrade of Shanghai Huayi's issuer rating and the lowering of the company's BCA reflects our expectations of its weak earnings and high debt leverage, against the backdrop of an oversupplied commodity chemicals industry, because of China's slowing economy," Gerwin Ho, Moody's vice president and senior analyst and the international lead analyst for Shanghai Huayi, said in a news release.
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