Moody's: Kunming Rail Transit view now negative

Moody's Investors Service said it affirmed the Baa1 issuer rating of Kunming Rail Transit Group Co., Ltd. (KRT) and the Baa1 senior unsecured rating on the U.S. dollar bonds issued by the company.

At the same time, Moody's said it revised the outlook to negative from stable.

“The negative outlook reflects our concern that the Kunming city government's capacity to support (GCS) its local government financing vehicles (LGFVs) is declining and likely to come under pressure due to signs of a fundamental weakening in Yunnan and Kunming, including materially higher debt burdens and a sharp reduction in land sales revenue,” said Ying Wang, a Moody's vice president and senior analyst, in a news release.

“The rating affirmation reflects our expectation that the Kunming city government will maintain its propensity to support KRT, given that the company is Kunming's largest state-owned enterprise and sole metro operator that undertakes nationally important metro projects.”

© 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.