Moody’s changes Haiken view to negative

Moody's Investors Service said it changed the outlook for Hainan State Farms Investment Holding Group Co., Ltd. (Haiken) and its debt-issuing subsidiary Hainan State Farms International (HK) Co Ltd. to negative from under review and affirmed the Baa2 ratings on the parent and the bonds it guarantees.

The confirmation and outlook revision conclude the review for downgrade initiated on Nov. 23, following Haiken's announcement it plans to buy up to a 70.8% stake in Halcyon Agri Corp. (HAC) from Sinochem International Corp., Moody’s said.

"The confirmation of the ratings is underpinned by (1) Haiken's strengthened industry position and higher geographic diversification after the acquisition as a global player in the rubber industry, (2) its strategic importance to the government and the industry, and (3) Sinochem International's provision of continued operational support to HAC," said Ying Wang, a Moody's vice president and senior analyst, in a press release.

"The negative outlook reflects Haiken's increased debt leverage as a result of the acquisition and the uncertainties over its deleveraging toward a level appropriate for its BCA over the next 12 to 18 months," added Ying.

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