Fitch rates Yunnan Provincial notes BBB

Fitch Ratings said it assigned an expected BBB to Yunnan Provincial Energy Investment Group Co., Ltd.'s proposed dollar-denominated notes.

The proposed notes will be issued by Yunnan Energy Investment Overseas Finance Co. Ltd., which is fully owned by Yunnan Provincial Energy, the agency said.

The proceeds will be used to refinance debt, replenish working capital and for general corporate purposes, Fitch said.

The ratings reflect the company's link to the province and salt and natural-gas platform, the agency said.

Fitch said it believes the province's low gas penetration and small market share do not support a rating upgrade at this stage.

But, the company's power-generation segment remains under pressure with power-generation volume and realized tariffs suffering from power oversupply and a high proportion of market-traded electricity in Yunnan province, the agency said.

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