Fitch affirms Shanghai Huayi

Fitch Ratings said it affirmed Shanghai Huayi (Group) Co.’s (Huayi) long-term issuer default rating and senior unsecured rating at BBB-.

The outlook is stable.

The agency also affirmed the BBB- rating on the $350 million senior unsecured notes due 2019 issued by Huayi Finance I Ltd. The notes are unconditionally and irrevocably guaranteed by Huayi Group (Hong Kong) Ltd., a 100%-owned subsidiary of Huayi, which granted a keepwell deed and a deed of equity interest purchase undertaking to ensure the issuer and guarantor have sufficient assets and liquidity to meet their obligations.

Huayi is a state-owned enterprise (SOE) owned by the Shanghai State-owned Assets Supervision and Administration Commission (Shanghai SASAC). Fitch said it assesses the company's ratings based on four factors set out in its Government-Related Entities Rating Criteria, resulting in a two-notch uplift from its standalone rating of BB.

The stable outlook reflects the agency’s expectation that Huayi's operations will remain stable and government support will remain strong.

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