Fitch lifts Huarong Industrial

Fitch Ratings said it raised Huarong Industrial Investment & Management Co., Ltd.'s long-term foreign-currency issuer default rating to B- from CCC. The agency also upgraded the outstanding senior unsecured bonds issued by Huarong Universe Investment Holding Ltd. and guaranteed by Huarong Industrial to B-/RR4 from CCC/RR4.

“The upgrade reflects Fitch reassessment of the parent subsidiary linkage (PSL) between wholly owned Huarong Industrial and the parent, China Huarong Asset Management Co., Ltd. (BBB/rating watch positive), to ‘moderate' from 'weak' after Fitch obtained additional operational and financial information. As a result, Huarong Industrial's ratings incorporate a two-notch uplift from its stand-alone credit profile (SCP), in line with Fitch's parent and subsidiary linkage rating criteria,” the agency said in a press release.

Fitch noted that China Huarong guaranteed CNY 3 billion or 25% of Huarong Industrial's external debt, excluding shareholder loans, at the end of the first half of 2021.

The outlook is stable.

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