S&P puts Guangzhou Industrial Investment Fund on watch

S&P said it placed its BBB+ long-term and A-2 short-term issuer credit ratings on Guangzhou Industrial Investment Fund Management Co. Ltd. (Sfund) on CreditWatch with negative implication.

S&P also placed its BBB+ long-term issue rating on the senior unsecured debt the company guarantees on CreditWatch with negative implications.

The CreditWatch placement reflects the recent change in Sfund's parentage – from Guangzhou government to Guangzhou City Construction Investment Group (GCCIG). The government still owns 100% of Sfund, but indirectly through GCCIG, its financing vehicle.

“In our view, the lower-tier ownership structure could lessen the likelihood of extraordinary government support for Sfund,” S&P said in a news release.

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