S&P: Yingde Gases notes BB-

Standard & Poor’s said it assigned a BB- long-term issue rating and cnBB+ long-term Greater China regional scale rating to a proposed issue of dollar-denominated senior unsecured notes by Yingde Gases Investment Ltd.

Yingde Gases Group Co. Ltd. will guarantee the notes.

The proceeds will be used for capital expenditure and general corporate purposes.

Yingde is expected to maintain its strong position in the niche on-site industrial gas supply market in China, given the significant capacity coming online over the next 12 months, S&P said.

Yingde’s planned large capital expenditure may push its leverage beyond 4x by end-2014, the agency said. But, the deterioration is likely to be only temporary due to a large debt-funded acquisition, S&P said.

There is a high chance that the company’s leverage will drop to less than 4x in 2015 and beyond due to increased gas supply, the agency said.

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