Huarong Financial Leasing (HRFL) was downgraded to BB+ from BBB- on its declining strategic importance to its parent, China Huarong AMC. S&P said that HRFL had become ” moderately strategic from highly strategic” following the announcement by China Huarong AMC on planning to sell all its holdings in HRFL to refocus on its core business and regulatory instructions. S&P added that it factored in a one notch of support uplift to reflect the CBIRC’s rules mandating the largest shareholder should provide its financial leasing subsidiary with liquidity and capital support when needed. S&P said that HRFL’s fundamental credit risk metrics remain largely stable. S&P revised the outlook to CreditWatch reflecting the uncertainty surrounding the ownership of HRFL.
Separately, Huarong International Holdings, an offshore unit of China Huarong AMC said that it repaid $1.35bn of 5Y bonds due Monday.
Huarong’s dollar bonds were stable with its 4.5% Perp at 99.69, yielding 6.3%.
For the full story, click here