Moody's cuts Shanghai Electric

Moody's Investors Service said it downgraded to Baa2 from Baa1 the issuer ratings of Shanghai Electric Holding Group Co., Ltd. (SEGC) and the company's key subsidiary, Shanghai Electric Group Co. Ltd. (SHE).

The agency also trimmed the senior unsecured bond issued by Shanghai Electric Group Global Investment Ltd. and guaranteed by SEGC to Baa2 from Baa1.

Additionally, Moody's placed all issuer and senior unsecured ratings on review for further downgrade and changed the outlook to ratings under review from negative.

"The downgrade of SEGC reflects the company's very high leverage due to a substantial contraction in EBITDA and high debt balance," said Gerwin Ho, a Moody's vice president and senior credit officer, in a press release.

The review for further downgrade, reflects concern that execution and market challenges amid industry headwinds will limit SEGC's ability to deleverage to support its rating over the next two years, the agency said.

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