Fitch rates Shanghai Electric notes A

Fitch Ratings said it assigned a final rating of A to Shanghai Electric Group Co. Ltd.’s €600 million 1 1/8% senior unsecured notes due 2020.

The notes will be issued by its wholly owned subsidiary, Shanghai Electric Newage Co. Ltd. and will be unconditionally and irrevocably guaranteed by Shanghai Electric, which will register the guarantee with the local branch of the State Administration of Foreign Exchange within the timeframe prescribed by SAFE rules, Fitch said.

The proposed notes are rated at the same level as Shanghai Electric’s senior unsecured debt rating as they represent direct, unconditional, unsecured and unsubordinated obligations of the company, the agency said.

Shanghai Electric’s rating is based on an assessment of its standalone credit profile at A-, plus a one-notch uplift to reflect the company’s moderate to strong linkages with the Shanghai municipal government, Fitch said.

The ratings also consider the company’s strong market position and strong technology leadership in China’s power equipment manufacturing industry, the agency said.

Shanghai Electric benefits from a moderate degree of product diversification, Fitch added.

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