Moody's upgrades China Baowu

Moody's Investors Service said it upgraded to A2 from A3 the issuer ratings of China Baowu Steel Group Corp. Ltd. and its subsidiary Baoshan Iron & Steel Co., Ltd. The agency also raised Baowu’s Baosteel Resources International Co. Ltd.’s issuer rating to A3 from Baa1.

"The upgrade of Baowu's rating primarily reflects its improving financial profile and enlarged scale as the world's largest steelmaker. We expect its strengthened leading position and competitive edge will allow it to maintain a robust financial profile over the next 12-18 months," said Roy Zhang, a Moody's vice president and senior analyst, in a press release.

"The upgrade of BISC's and BRIC's ratings reflects the close linkage of their ratings to the rating of Baowu, as we consider the likelihood of extraordinary support from Baowu to be high given their strategic importance to the parent," Zhang added.

The outlooks on all issuers are stable.

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