Moody’s cuts Beijing Enterprises, bonds

Moody's Investors Service said it downgraded Beijing Enterprises Holdings Ltd.’s (BEHL) issuer rating to Baa1 from A3.

At the same time, the agency downgraded the issuer rating of Beijing Enterprises Group (BVI) Co. Ltd. (BE BVI) to Baa1 from A3.

Moody's also downgraded the senior unsecured rating for the bonds guaranteed by BEHL or BE BVI – and issued by Mega Advance Investments Ltd., Talent Yield (Euro) Ltd., Talent Yield Investments Ltd. and Charter Style International Ltd. – to Baa1 from A3.

The outlook is stable. The actions conclude the review for downgrade initiated on Nov. 9.

"The downgrade reflects the significant weakening of BEHL's standalone credit profile, due to its acquisitive appetite and heightened business risks, in particular, its acquisition of EEW Holdings GmbH in March 2016 and announced investment in Verknechonskneftegaz in November 2016," Moody's vice president and senior analyst Ada Li said in a news release.

"BEHL's weakened standalone credit profile is partly offset by the high level of government and parental support, and the group's stable and regulated water and gas distribution businesses, resulting in the one-notch downgrade."

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