Fitch rates Yunnan notes BBB

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

The bonds are issued by Yunnan Energy Investment Overseas Finance Co. Ltd. – an effectively wholly owned off-shore subsidiary of Yunnan Provincial Energy.

The company is entering into a keepwell deed and a deed of equity interest purchase and investment undertaking to provide credit support to the bonds, Fitch said.

The ratings are credit-linked, but not equalized with the internal credit assessment of Yunnan province, the agency said.

The linkages are evident in the province's effective majority ownership of the company and oversight of its management and strategies, the high strategic importance of the company’s investments to the province, as well as policy support rendered to the company, Fitch said.

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