Moody's upgrades China Baowu, Baoshan Iron, Baosteel

Moody's Investors Service said it upgraded the issuer ratings of China Baowu Steel Group Corp. Ltd. to A3 from Baa1, along with the its key listed subsidiary, Baoshan Iron & Steel Co., Ltd.

The agency also upgraded issuer rating of Baosteel Resources International Co. Ltd. to Baa1 from Baa2;

Moody's also upgraded the senior unsecured rating on the dollar-denominated bond issued by Baosteel Financing 2015 Pty Ltd., a wholly owned subsidiary of Baosteel Resources, to Baa1 from Baa2. The bond is guaranteed by Baosteel Resources and supported by Baowu through a keepwell agreement, the agency noted.

The senior unsecured rating on the dollar-denominated bond issued by Bao-trans Enterprises Ltd. also was upgraded to Baa1 from Baa2.

The bond is supported by Baoshan Iron through a keepwell agreement, Moody's said.

The outlook is stable.

The upgrades reflect the improvement in its operating performance and financial profile, which the agency expects the company will sustain with an adjusted debt-to-EBITDA ratio of about 3x in 2018 and 2019.

This level of leverage is much lower than the 5.7x ratio recorded in 2016, Moody's said.

The improvement in the company's performance is underpinned by improved conditions in China's steel sector as the government continues its supply-side reform, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.