Moody’s may lower Wanhua Chemical

Moody’s Investors Service said it put on review for downgrade the Baa3 issuer rating of Wanhua Chemical Group Co., Ltd., as well as the Baa3 rating on the senior unsecured notes issued by Wanhua Chemical International Holding Co., Ltd. and guaranteed by Wanhua Chemical.

The review is due to the company’s weaker-than-expected operating performance for the year ended Dec. 31, 2015 against the backdrop of a slowdown in Chinese demand, Moody’s said.

The company faces challenges ahead in lowering its elevated debt levels over the next 12- to 18-months, the agency added.

Moody’s also noted the company’s worsening liquidity position.

The company’s adjusted debt-to-EBITDA ratio rose to about 5x at year-end 2015, up from 4x at the end of 2014, the agency said.

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