Fitch cuts Datang

Fitch Ratings said it downgraded Datang International Power Generation Co., Ltd.'s long-term foreign-and local-currency issuer default ratings and senior unsecured ratings to BB from BB+, and affirmed its short-term foreign- and local-currency issuer default rating at B.

The outlook is stable.

The downgrades reflect the company and its controlling shareholder, China Datang Corp.'s higher-than-expected leverage, Fitch said, as well as the increased business risk from their diversification into non-core businesses of coal-to-chemical and coal-to-gas projects.

The agency also said it downgraded the company's standalone rating to BB from BB+ and lowered its assessment of China Datang's credit strength due to both companies' limited ability to de-leverage, given their large debt-funded capital expenditure programs to develop renewable energy capacity, nuclear power generation, coal-mine development and coal-to-chemical and coal-to-gas projects.

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