Fitch lifts Sinochem Hong Kong

Fitch Ratings said it upgraded Sinochem Hong Kong (Group) Co. Ltd.'s long-term issuer default rating to A- from BBB+ and senior unsecured ratings to A- from BBB+.

The ratings upgraded include SPV Sinochem Overseas Capital Co. Ltd.'s $1.5 billion 4½% senior notes due 2020 to A- from BBB+ and $500 million 6.3% senior notes due 2040 to A- from BBB+. The rating on SPV Sinochem Global Capital Co., Ltd.'s $500 million 5% perpetual securities also was upgraded to BBB from BBB-. All of the issues are guaranteed by Sinochem Hong Kong.

The outlook is stable.

The upgrades follow a change to using a top-down approach instead of a bottom-up approach under Fitch's rating criteria, the agency said.

Sinochem Hong Kong's ratings are equalized with that of its parent company, which are two notches lower than China's sovereign rating of A+, Fitch said.

Sinochem is now assessed to have stronger linkage with the state due to the increasing importance of its agrochemical operations, especially in seeds, the agency said.

This conclusion is supported by more detailed information of specific state-driven activities performed by Sinochem that has been provided by the company, Fitch said.

Sinochem's agrochemical operations are the only horizontally and vertically integrated ones in China, with market coverage of 95%, the agency said.

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