Fitch trims Huarong Industrial

Fitch Ratings said it downgraded Huarong Industrial Investment & Management Co., Ltd.’s (formerly Huarong Real Estate Co. Ltd.) long-term foreign-currency issuer default rating and its guaranteed bond due 2022 to BBB+ from A-. The agency removed all ratings from rating watch negative.

Huarong Industrial is a wholly owned subsidiary of China Huarong Asset Management Co., Ltd., and rated two notches below the parent, in line with Fitch’s parent and subsidiary linkage rating criteria. Huarong Industrial is a core subsidiary of China Huarong’s main distressed asset management business, despite its low revenue contribution and small asset size, the agency said.

“The reassessment of the PSL and the downgrade is due to China Huarong’s main overseas operating hub and debt-issuance platform, China Huarong International Holdings Ltd. (Huarong International), being spun-off from Huarong Industrial in 2019,” Fitch said in a press release.

The outlook is stable.

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