Fitch downgrades Yuzhou to C

Fitch Ratings said it downgraded Yuzhou Group Holdings Co. Ltd.’s long-term foreign-currency issuer default rating to C from CCC- and downgraded the company's senior unsecured rating to C from CCC- with the recovery rating remaining at RR4.

The downgrades follow Yuzhou's announcement that is has launched an offer to exchange two bonds, due on Jan. 23, 2022 and Jan. 25, 2022, with outstanding amounts of $242 million and $340 million, respectively.

“Fitch considers this a distressed debt exchange (DDE) as per our criteria,” the agency said in a news release.

The IDR will be downgraded to RD (restricted default) if the proposed exchange offer is successfully carried out, and Fitch will subsequently re-rate Yuzhou's IDRs to a level that is consistent with the company's post-exchange capital structure and risk profile, which would be likely to be within a very low speculative-grade range, Fitch said.

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