S&P assigns Zhejiang Expressway, notes A

S&P said it assigned A ratings to Zhejiang Expressway Co. Ltd. (ZJE) and its senior unsecured notes. The company is a unit of Zhejiang Communications Investment Group Co. Ltd. (ZJC).

“Our rating on ZJE reflects our view that the company will remain a core subsidiary of ZJC. We equalize the rating on ZJE with the group credit profile of ZJC. We expect the group to receive robust extraordinary support from the Zhejiang provincial government in case of financial distress. ZJC is the largest state-owned enterprise in Zhejiang. The group is fully owned by the provincial government and is its sole platform for investment in transportation infrastructure. ZJC owns more than 67% of the toll roads and 72% of the railway network in the province,” S&P said in a press release.

The agency said it forecasts the company's ratio of funds from operations (FFO) to debt will be 27%-30% over the next two years.

The outlook is stable.

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