Moody’s: Yingde Gases on downgrade review

Moody’s Investors Service said it placed on review for downgrade Yingde Gases Group Co. Ltd.’s B1 corporate family rating, along with the B2 senior unsecured rating on the bonds issued by Yingde Gases Investment Ltd., which are Yingde Gases.

Moody’s said it is concerned that the continued adverse operating environment in the steel industry will heighten the company’s liquidity risk and adversely affect its working capital position.

The agency said it expects the company’s capital expenditure will likely total about RMB 1 billion and that it will continue to distribute dividends. Such a situation indicates that the company will need to refinance substantially its short-term debt obligations or raise substantial debt to fund its capital expenditure, Moody’s said.

But the weakness in the steel industry will challenge the company’s ability to raise new debt or refinance its short-term debt obligations, the agency said.

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