Fitch cuts China Huarong

Fitch Ratings said it downgraded China Huarong Asset Management Co., Ltd.'s long-term issuer default rating to BBB from A. The company remains on rating watch negative.

The agency also lowered the ratings of the notes issued under Huarong Finance II Co. Ltd., Huarong Finance 2017 Co., Ltd., and Huarong Finance 2019 Co., Ltd., including the senior unsecured notes to BBB from A. Fitch trimmed the senior unsecured perpetual notes to BB+ from A-, and the legally subordinated perpetual notes to BB- from BBB, both by an extra notch. The notes are guaranteed by China Huarong International Holdings Ltd., and credit-linked to China Huarong and Fitch's internal assessment of Huarong International. The notes also remain on RWN.

“The downgrade is driven by a reassessment of the government support factors under Fitch's government-related entities (GRE) rating criteria. Fitch believes the government sponsor's indication of support has not been as forthcoming amid China Huarong's weakness in its offshore funding channel after the company announced a delay in publishing its annual result,” the agency said in a press release.

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