Moody’s lowers Yingde Gases

Moody’s Investors Service said it downgraded Yingde Gases Group Co. Ltd.’s corporate family rating to B1 from Ba3.

Moody’s also said it downgraded the senior unsecured rating on the bonds to B2 from B1 issued by Yingde Gases Investment Ltd. and guaranteed by Yingde Gases.

The outlook is stable.

The downgrades reflect the considerable challenges Yingde Gases faces, stemming from its heavy exposure to the domestic steel industry, Moody’s said.

The downgrades also consider its weakened liquidity profile, following the company’s substantial increase in short-term debt in the first half of 2015, the agency said.

Moody’s said it anticipates that the operating environment for Chinese steelmakers will become more difficult over the next one to two years, given the sluggish steel demand amid softening economic growth.

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