S&P drops Yihua Enterprise

S&P said it dropped Yihua Enterprise (Group) Co. Ltd. to SD from CCC and its guaranteed notes CC from CCC-.

The downgrade follows Yihua missing an interest payment on its RMB 1 billion of notes due 2022.

“Yihua is still servicing its $250 million guaranteed senior unsecured notes due on Oct. 23, 2020. However, the company faces significant repayment risk on its debt. Yihua’s liquidity is very weak, with an estimated cash balance of less than RMB 1 billion as of Dec. 30, 2019. This is insufficient to cover the company’s bullet maturities of RMB 5.5 billion for the rest of 2020,” said S&P in a press release.

S&P said it doesn’t think the city of Shantou will help the company or that Yihua can arrange to refinance three bonds valued at RMB 2.8 billion due in July.

S&P decided to withdraw its ratings due to insufficient information after the auditor of a key subsidiary said it couldn’t express an opinion on the validity of the financials, the agency said.

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