(The following statement was released by the rating agency)
Jan 31 - Fitch Ratings has assigned a final rating of ‘BBB+’ to the USD 500m 3.85% senior unsecured notes due 2023 issued by China Railway Resources Huitung Limited and guaranteed by China Railway Group Limited (CREC, ‘BBB+'/Stable).
This follows the receipt of documents conforming to information already received. The final rating is in line with the expected rating assigned on 23 January 2013.
Using a top-down approach in its “Parent and Subsidiary Rating Linkage” criteria, Fitch has notched CREC’s ratings three levels below China’s sovereign rating of Long-Term IDR ‘A+'/ Stable to reflect CREC’s strong operational and strategic ties with the Chinese government through its 56.1% parent, China Railway Engineering Corporation (CRECG). The latter is 100% owned by the state-owned Assets Supervision and Administration Commission (SASAC). CREC accounts for almost all of CRECG’s assets.
The Stable Outlook reflects Fitch’s expectation of continued state support for CREC.
Positive: Future developments that may, individually or collectively, lead to positive rating action include:
- Positive rating action on the Chinese sovereign
- Strengthening linkages between CREC and the Chinese sovereign
Negative: Future developments that may, individually or collectively, lead to negative rating action include:
- Negative rating action on the Chinese sovereign
- Weakening linkages between CREC and the Chinese sovereign