Fitch hikes Zhongyuan Asset, notes

Fitch Ratings said it raised Zhongyuan Asset Management Co., Ltd.'s long-term foreign- and local-currency issuer default ratings to BBB from BB+. The agency also upgraded Zhongyuan AMC's guaranteed $110 million of 7½% senior unsecured notes that were issued by Zhongyuan Dayu International (BVI) Co., Ltd.) due November 2024 to BBB from BB+.

“The rating upgrade reflects the revision of the support record and financial implications of default to 'strong' from 'moderate'. This is based on the recent capital injections and ongoing capital support from the Henan provincial government to support Zhongyuan AMC's policy role.

“This includes the acquisition of a sizeable nonperforming asset (NPA) package from Zhongyuan Bank as part of its restructuring plan and a planned stability fund investment that is managed on behalf of the Henan provincial government. The government shareholding is likely to increase to 95% from 86%,” Fitch said in a press release.

The outlook is stable.

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