Moody's lifts Shanghai Huayi view to positive

Moody's Investors Service said it changed to positive from stable the outlook on Shanghai Huayi (Group) Co.'s Ba1 corporate family rating and Ba2 senior unsecured rating on the bond issued by Huayi Finance I Ltd. and guaranteed by Huayi Group (Hong Kong) Ltd.

Moody's also said it affirmed the ratings.

The outlook revision reflects an expectation that Huayi's improved credit profile will likely be sustained at levels strong for its rating in the next 12- to 18-months, Moody's said.

Huayi's adjusted debt-to-EBITDA improved significantly to 3.6x for the 12 months that ended June 2018, from 4.9x in 2017, the agency said.

The earnings improvement was mainly driven by increased selling prices for Huayi's key chemical products, Moody's said.

The gains were offset partially by lower profits from its chemical services business due to lower sales in the property sector during the period, the agency said.

As China's economic growth slows into 2019, Moody's said it expects Huayi's adjusted debt-to-EBITDA will soften to 4.8x to 4.9x in the next 12- to 18-months, driven by lower EBITDA.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.