Fitch places Chinese issuers on watch

Fitch Ratings said it placed the ratings of several government-related entities and their subsidiaries on rating watch negative following a peer review of a portfolio of Chinese GREs.

These entities are: HBIS Group Co., Ltd. and debt issued by HBIS Group Hong Kong Co., Ltd., Jiuquan Iron and Steel (Group) Co., Ltd. and debt issued by Jisco SR Pearl Ltd., Kunming Iron & Steel Holding Co., Ltd., Yunnan Provincial Energy Investment Group Co., Ltd., its subsidiary Yunnan Energy Investment (HK) Co. Ltd. and debt issued by Yunnan Energy Investment Overseas Finance Co. Ltd.

“The number of defaults involving public debt instruments issued by GREs has risen over the last 18 months, although they remain low compared with the number of GRE issuers. We expect the increase to continue as deleveraging remains a core policy objective of the Chinese government to limit the accumulation of financial risks that could destabilize the economy. Tolerance of defaults, including at state-linked entities, appears to have increased,” the agency said in a press release.

The RWNs will be resolved as soon as practicable, Fitch said.

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