Moody's lowers Shanghai Electric

Moody's Investors Service said it downgraded to Baa3 from Baa2 the issuer ratings of Shanghai Electric Holding Group Co., Ltd. (SEGC) and its subsidiary, Shanghai Electric Group Co. Ltd. (SHE).

The agency also lowered to Baa3 from Baa2 the ratings on the senior unsecured bonds issued by Shanghai Electric Group Global Investment Ltd. and guaranteed by SEGC.

Moody’s said it changed the outlook to negative from ratings under review. These actions conclude the review for downgrade started on May 27.

"The downgrade reflects Moody's expectation that SEGC's leverage will remain elevated due to the company's high debt balance and weak earnings. In addition, challenges amid industry headwinds and pandemic disruptions will constrain SEGC's ability to significantly deleverage in the next two years," said Gerwin Ho, a Moody's vice president and senior credit officer, in a press release.

The negative outlook reflects SEGC’s leverage, estimated to stay above 11x in 2022 and 2023, and the risks of its deleveraging plan, the agency said.

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