Fitch cuts China Grand Auto

Fitch Ratings said it downgraded to B from B+ China Grand Automotive Services Group Co., Ltd.'s long-term foreign-currency issuer default rating and its senior unsecured rating. The recovery rating is RR4. All ratings have been placed on rating watch negative.

“The downgrade reflects CGA's upcoming concentrated debt maturities and the impact on liquidity. Weaker access to capital markets could increase its reliance on specific funding sources, such as short-term bank loans. Tighter liquidity may also hurt CGA's competitiveness and its ability to restock inventory relative to better-capitalized peers once the auto industry recovers as we expect in 2022 as global supply constraints from chip shortages ease,” Fitch said in a press release.

The RWN indicates the possibility of further negative action unless there is progress on refinancing its significant debt maturities, the agency said.

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