Moody's rates Hidili bonds B1

Moody's Investors Service said it assigned a provisional B1 corporate family rating to Hidili Industry International Development Ltd. , along with a provisional B1 senior unsecured rating to proposed bonds to be issued by Hidili.

The outlook is stable.

The provisional status will be removed upon completion of the bond issue.

If the transaction fails to go ahead, or if the final bond issue size materially differs from expectation, the ratings will be under pressure in view of the company's weak liquidity and the resulting refinancing risk, Moody's said.

The ratings reflect Hidili's ownership of well-located coking coal assets, the agency said, and integrated operations with a low cost base, which supports its good profitability.

The rating also captures Hidili's small scale and high customer concentration, Moody's said, and its short operating history at its current scale.

The company's profitability is highly sensitive to the cyclical coal prices and demand from the downstream steel industry, though Moody's said there is solid demand for coking coal expected over the near term from the Chinese steel manufacturers.

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