Moody's rates Qilu Expressway Baa2

Moody's Investors Service said it assigned a first-time Baa2 issuer rating to Qilu Expressway Co. Ltd.

The outlook is stable.

“Qilu Expressway's credit profile is underpinned by the company's ownership of high-quality operating toll road assets in the economically strong Shandong province, with stable traffic volume and toll revenue growth,” said Ada Li, a Moody's vice president and senior credit officer, in a news release.

“At the same time, the company's credit strengths are counterbalanced by its small toll road assets scale, and high reliance on a single key road asset, the reconstruction and expansion of which will heavily weigh on the company's credit metrics in the next two to three years.”

Qilu Expressway's Baa2 issuer rating incorporates the company's standalone credit profile and a two-notch rating uplift based on Moody's expectation of strong support from its ultimate parent, Shandong Hi-speed Group Co., Ltd. (SDHG, A3 stable), when needed.

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