S&P lowers Yihua Enterprise

S&P said it lowered the long-term issuer credit rating on Yihua Enterprise (Group) Co. Ltd. to B- from B.

The agency also said it lowered the rating on the company to CCC+ from B-.

Yihua faces rising liquidity pressure, given its low cash balance, meager free operating cash flow and slower-than-expected cash collection from asset sales against sizable short-term debt maturities, S&P said.

The company's strained access to long-term funds and uncertainty surrounding cash inflow leave little margin for error in refinancing, the agency said.

The downgrade is based on Yihua's weakened liquidity with sizable debt maturities in 2019 and 2020, only moderate amount of cash on its balance sheet and a challenging refinancing environment for privately held companies in China, S&P said.

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