S&P cuts Shandong Sanxing

S&P said it downgraded the ratings on Shandong Sanxing Group Co. Ltd. and its guaranteed senior unsecured notes to B from B+. The ratings are on CreditWatch with negative implications.

“The downgrade and negative CreditWatch placement reflect Sanxing's slow progress on refinancing a sequence of bullet maturities that start coming due later this year. Our downgrade is also based on the company's reduced liquidity buffer post its repayment of 2019 maturities. The recent coronavirus outbreak in China is likely to complicate Sanxing's refinancing efforts,” said S&P in a press release.

The agency forecasts Sanxing to generate between RMB 150 million-RMB 200 million of free cash flow in 2020. This is insufficient to cover bullet maturities of RMB 1.5 billion between September and October and RMB 1.9 billion in January 2021. These totals include RMB 1.1 billion of onshore puttable bonds with extendable tenor; if these redemption rights are not exercised, then liquidity risk will become less imminent.

S&P said it aims to resolve the CreditWatch listing by the end of March, by reviewing Sanxing's progress implementing its refinancing plan amid an uncertain economic and credit environment.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.