December 8, 2017 / 3:01 AM / 7 days ago

Fitch Publishes Yangzhou Urban Construction's 'BBB' Rating; Rates Proposed USD Notes

(The following statement was released by the rating agency) HONG KONG, December 07 (Fitch) Fitch Ratings has published Yangzhou Urban Construction State-owned Assets Holding (Group) Co., Ltd's (YUCH) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BBB'. The Outlook is Stable. Fitch has also assigned YUCH's proposed senior unsecured US dollar notes an expected rating of 'BBB(EXP)'. The notes will be directly issued by YUCH. The proposed notes will rank pari passu with all other YUCH's present and future unsecured and unsubordinated obligations. Proceeds will be used for general corporate purposes. The final ratings on the proposed US dollar notes are contingent upon the receipt of final documents conforming to information already received. KEY RATING DRIVERS Linked to Yangzhou Municipality: YUCH's ratings are credit linked to, but not equalised with, those of Yangzhou Municipality in China's eastern Jiangsu Province. This reflects the municipality's 100% ownership of the entity, strong government oversight on its financials, and the strategic importance of the entity's operation to the municipality. These factors result in a high likelihood of extraordinary support, if needed. Therefore, YUCH is classified as a credit-linked public-sector entity under Fitch's criteria. Yangzhou's Creditworthiness: Yangzhou ranked among the top 40 of more than 300 Chinese cities by gross regional product (GRP) in 2016. Yangzhou's GRP growth was higher than that of Jiangsu Province as well as the national average during the past decade. The municipality also reported a strong fiscal performance, has a diversified socio-economic profile and a strategic location in the centre of Jiangsu Province. The strength is mitigated by the contingent liabilities arising from its public-sector entities. Legal Status - Mid-Range: YUCH is registered as a state-owned limited liability company under Chinese company law and is allowed to go bankrupt. Strategic Importance - Stronger: YUCH is the largest investment vehicle of Yangzhou Municipality and plays an important role in implementing the municipal government's blueprint for urban infrastructure construction, social housing and primary land development. The company also provides services necessary to the city's daily operation, including natural gas utilities, water supply, sewage treatment and public transportation. Integration Attribute - Mid-Range: YUCH's integration with the municipality's budget reflects the historical capital injections and subsidies made by the government. During the past five years, the government has provided around CNY20 billion of capital injections to the company. In addition, the company has received subsidies of over CNY500 million each year from the government. Control Attribute - Stronger: YUCH is wholly owned by the municipal government, the board members of YUCH are mainly appointed by the government, and major projects require the government's approval. YUCH's financing plan and debt levels are closely monitored by the government, and the company is required to report its operational and financial results to the government. 'B' Category Standalone Profile: YUCH's standalone credit profile is constrained by the public-service nature of its business in developing public infrastructure, social housing as well as providing public services. Its debt to EBITDA ratio was below 25x in 2015. The weak standalone credit profile is mitigated by its strategic links with the government, which may provide monetary and non-monetary support to the company. RATING SENSITIVITIES Links with Sponsor: An upgrade of Fitch's internal assessment of the creditworthiness of Yangzhou may trigger positive rating action on YUCH. A significant weakening YUCH's strategic importance to the municipality, dilution of the municipal government's shareholding, and/or reduced municipal government support, may result in a downgrade. A downgrade may also stem from weaker fiscal performance or increased indebtedness of the municipality, leading to deterioration in its creditworthiness. Any change in the IDRs of YUCH will result in a similar change in the ratings of the proposed notes. Contact: Primary Analyst Fan Gao Analyst +852 2263 9960 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central, Hong Kong Secondary Analyst Samuel Kwok Associate Director +852 2263 9961 Committee Chairperson Christophe Parisot Managing Director +33 1 44 29 91 34 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria International Local and Regional Governments Rating Criteria - Outside the United States (pub. 18 Apr 2016) here Rating of Public-Sector Entities – Outside the United States (pub. 22 Feb 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here Solicitation Status here#solicitation Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE here. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below