Fitch gives Beijing Energy International A

Fitch Ratings said it assigned first-time issuer default and senior unsecured ratings of A to Beijing Energy International Holding Co. Ltd. The outlook is stable.

“BEIH is rated one notch down from its 32% parent, Beijing Energy Holding Co., Ltd. (BEH, A+/stable), based on a strong parent, weak subsidiary approach under Fitch's parent and subsidiary linkage rating criteria. We assess BEH has medium legal, strategic and operational incentives to support BEIH, which acts as a strategically important renewable-energy investment platform of BEH. It plans to account for around 73% of the group's renewable energy capacity target by end-2025,” the agency said in a press release.

Fitch noted that as of June, BEH guaranteed 36% of BEIH's debt issued at offshore and onshore holding companies.

However, the agency said it estimates BEIH’s EBITDA net leverage will exceed 10x in 2022-2025 due to high capital expenditures, which keeps free cash flow in negative territory. “Nevertheless, we think BEIH has adequate financial flexibility, buoyed by solid access to loans from the parent and bank financing, aided by parental support.”

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