Fitch puts Kunming Iron on evolving watch

Fitch Ratings said it placed Kunming Iron & Steel Holding Co., Ltd.’s long-term BBB- issuer default and senior unsecured ratings on rating watch evolving. The rating action follows the Feb. 1 announcement the Yunan government placed the company under China Baowu Steel Group Corp.’s entrusted management before a share transfer into Baowu.

Simultaneously, Fitch placed the rating of the $200 million of 7 3/8% senior notes issued by New Dian Group Pte. Ltd. and guaranteed by Kunming, which are due on April 23, on RWE.

“KISC’s rating is currently notched from Fitch’s internal assessment of the creditworthiness of Yunnan province based on our government-related entities rating criteria. The RWE reflects the uncertainty about KISC’s ratings after the transaction completion, as it will be rated under Fitch’s parent and subsidiary linkage rating criteria, and we may use either a top-down or bottom-up rating approach,” Fitch said in a press release.

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