Fitch revises Zhongliang view to negative

Fitch Ratings said it revised the outlook on Zhongliang Holdings Group Co. Ltd.'s to negative from positive and affirmed the long-term foreign-currency issuer default rating at B+. The agency also affirmed the senior unsecured rating at B+ with an RR4 recovery rating.

Fitch said it removed all the ratings from under criteria observation, on which they were placed on Oct. 20, after the publication of its updated corporate rating criteria.

“The negative outlook reflects decreasing financial flexibility amid high capital-market volatility. We expect Zhongliang to use its cash balance and internal cash to repay its concentrated capital-market debt, amounting to $1.2 billion, in the next nine months,” the agency said in a press release.

Fitch noted that Zhongliang had unrestricted cash of CNY 20 billion at the end of October, with more than 20% at the holding company level and available for offshore bond repayment. “Zhongliang also said access to sales proceeds from project companies remains uninterrupted.”

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