Fitch upgrades Honghua

Fitch Ratings said it upgraded Honghua Group Ltd.'s long-term foreign-currency issuer default rating to B from B-.

The outlook is stable.

Honghua's senior unsecured rating and the rating on the $200 million 7.45% senior unsecured notes due 2019 also were upgraded to B from B-. The recovery rating remains at RR4.

The upgrades reflect increased evidence of linkages with its controlling shareholder, China Aerospace Science and Industry Corp. Ltd., Fitch said.

The agency said it has assessed the legal, operational and strategic ties between Honghua and China Aerospace as moderate and therefore applied a one-notch uplift from Honghua's standalone credit profile.

Fitch also said it assessed Honghua's stand-alone credit profile at B-, supported by improved profitability and recovery in positive funds from operations (FFO) generation.

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