Moody’s reviews Huayi

Moody's Investors Service said it placed Shanghai Huayi (Group) Co.’s (Huayi) Baa3 issuer rating under review for downgrade.

At the same time, the agency placed under review for downgrade the Ba1 rating on the dollar-denominated notes issued by Huayi Finance I Ltd. and irrevocably and unconditionally guaranteed by Huayi Group (Hong Kong) Ltd., a wholly owned subsidiary of Huayi. The notes benefit from a keepwell and liquidity support deed and a deed of equity interest purchase undertaking provided by Huayi.

"The rating review reflects the continued weakness in Huayi's core business earnings, elevated debt leverage, reinvestment needs and related execution risk in the next 1-2 years, amid a slowing domestic economy," Gerwin Ho, Moody's vice president, senior analyst and international lead analyst for Huayi, said in a news release.

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