HONG KONG, January 26 (Fitch) Fitch Ratings has downgraded
China Medical Technologies' (CMED) 'B+' Issuer Default Rating
Fitch has learned that no payment has been received on the
scheduled coupon, due 15 December 2011, on CMED's USD125m 6.25%
convertible senior notes, due 2016. Fitch understands that the
cure period for the coupon ended on 14 January 2012. The cure
period refers to a provision in a contract allowing a defaulting
party to fix the cause of a default.
As a result, the non-payment is consistent with Fitch's
analysis of a 'RD' rating - signifying the uncured expiry of any
applicable grace period, cure period or default forbearance
period following a payment default on a material financial
obligation. Fitch does not typically assign ratings to
convertible bonds, but, subject to their individual terms, they
are generally treated as debt instruments prior to conversion
for the purposes of its financial analysis.
On 13 December 2011, CMED announced a "debt restructuring
plan to improve its balance sheet". Fitch had previously treated
the announcement as an opportunistic move to take advantage of
the low market prices of its public debt. According to the
company, it had USD206m of cash as at 30 September 2011.