S&P puts GCL New Energy on watch

S&P said it placed its BB- long-term issuer credit rating on GCL New Energy Holdings Ltd. and the B+ long-term issue rating on the senior unsecured bonds issued by the company on CreditWatch with negative implications.

GCL New Energy is the largest non-state-owned solar farm developer and operator in China. The company is 62.3% owned by GCL-Poly Energy Holdings Ltd.

The CreditWatch action on GNE reflects the heightened financial risk of the parent GCL-Poly, S&P said.

“In our view, the financial performance of GCL-Poly is likely to materially weaken in the next 12-18 months due to worsening overcapacity in China's solar material sector, and the uncertainty around the group's deleveraging efforts,” S&P said in a news release.

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