Fitch upgrades China Huarong

Fitch said it upgraded China Huarong Asset Management Co., Ltd.'s long-term issuer default ratings to BBB+ from BBB.

Fitch also raised the rating of the senior unsecured notes issued by Huarong Finance II Co. Ltd., Huarong Finance 2017 Co., Ltd. and Huarong Finance 2019 Co., Ltd. to BBB+ from BBB in addition to Huarong Finance 2017's senior unsecured perpetual notes to BBB- from BB+ and Huarong Finance 2019's subordinated perpetual notes to BB from BB-.

The agency concurrently removed all ratings from rating watch positive on which they were placed on Aug. 23.

“The one-notch upgrade follows the completion of China Huarong's recapitalization, and the agency's subsequent reassessment of extraordinary support expectations, which was driven by the removal of a criteria variation that had led to a top-down approach beyond the standard three notches in April 2021. Fitch views a recapitalization of some government-related entities (GRE) as a form of extraordinary support. This has removed uncertainty over the governance of support,” the agency said in a press release.

The outlook is stable.

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