Moody's eyes Lanzhou Construction for trim

Moody's Investors Service said it placed on review for downgrade the Baa3 issuer rating of Lanzhou Construction Investment (Holding) Group Co., Ltd. and the Baa3 senior unsecured rating on the bonds issued by City Development Co. of Lan Zhou and guaranteed by Lanzhou Construction. The outlook is changed to under review from stable.

"The review for downgrade reflects the company's weaker-than-expected funding access due to the challenging funding environment in the fundamentally weak regions. As a result, we expect that Lanzhou Construction will increase its reliance on short-term and high-cost borrowings to meet its refinancing needs in the next 12 months, which will weaken its credit profile compared with its Baa3 rated peers," said Ying Wang, a Moody's vice president and senior analyst, in a press release.

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