Moody's cuts Weifang Urban to junk

Moody’s Investors Service said it downgraded Weifang Urban Construction and Development Investment Group Co., Ltd.’s issuer and senior unsecured ratings to Ba1 from Baa3. High-yield issuers are assigned corporate family ratings instead of issuer ratings. The agency also revised the outlook to negative from under review for downgrade.

"The downgrade reflects the deterioration of Weifang government's capacity to support (GCS) its local government financing vehicles (LGFVs) due to continued weakening of liquidity and funding conditions for its state-owned enterprises (SOEs) and LGFVs," said Stephen Tang, a Moody's assistant vice president and lead analyst for Weifang Urban Construction, in a press release.

The negative outlook reflects the concern that regional liquidity challenges could hurt Weifang Urban Construction, weakening its access to funding or elevating its contingent risks given it would have to support weaker regional SOEs and LGFVs.

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