April 7, 2017 / 2:48 AM / 7 months ago

Fitch Rates Nanjing Yangzi at 'A-'; Outlook Stable

(The following statement was released by the rating agency) HONG KONG/SHANGHAI, April 06 (Fitch) Fitch Ratings has assigned Nanjing Yangzi State-owned Investment Group Co., Ltd. (NYSI) Long-Term Foreign- and Local-Currency Issuer Default Ratings of 'A-' with a Stable Outlook. KEY RATING DRIVERS Links to Nanjing Municipality: NYSI's ratings are closely credit-linked to, but not equalised with, Nanjing municipality. Fitch's view is based on full government ownership and hence oversight of NYSI, as well as the high strategic importance of the entity's operation to the municipality. NYSI's strong operational ties with its sponsor result in a high likelihood of extraordinary support, if needed, from the municipality. NYSI is classified as a credit-linked public-sector entity under Fitch's criteria. Nanjing's Creditworthiness: As the capital of Jiangsu province, Nanjing is an upper-tier city with a favourable socio-economic profile; it has a dynamic workforce and above-average gross domestic product per capita. Backed by a strong economy and expanding tertiary segment, Nanjing has achieved solid budgetary performance and tax revenue growth over the past two years. The municipality's strategic importance and systematically higher level of provincial support should mitigate its moderately high contingent liabilities arising from its public-sector entities. Legal Status "Mid-Range": NYSI is registered as a state-owned limited liability company and is managed and wholly-owned by the Jiangbei New Area Administrative Committee (JNAAC), a sub-department of Nanjing municipality. NYSI is allowed to bankrupt under its current legal status and its employees are not all civil servants. Therefore, its legal status does not indicate automatic absorption of its liabilities by Nanjing municipality. Control and Supervision "Stronger": NYSI's board is ultimately appointed by Nanjing municipality with input from JNAAC, Nanjing State-Owned Assets Supervision and Administration Commission, Nanjing Finance Bureau and others. The company is required to regularly report its operational and financial results. Moreover, the government has strong oversight over NYSI's financing plan and debt level and all major projects require government approval. Strategic Importance "Stronger": NYSI is the flagship local government funding vehicle platform for developing Nanjing Jiangbei New Area, a state-level area similar to Tianjin's Binhai New Area. NYSI plays an important role in carrying out the government's initiatives, including public construction, industrial park management and utility services. Considering Jiangbei is the only new area in Jiangsu province, NYSI should be strategically important to both Jiangsu province and Nanjing municipality. Fitch believes that a default of NYSI could have negative political consequences for Nanjing and damper the ability of NYSI to obtain continued external funding. Government Integration "Mid-Range": NYSI has established close financial and operational ties with Nanjing municipality. Financially, NYSI has received a combination of injections and subsidies; the latter accounted for 17% of revenue and 89% of net profit between 2014-2015. Fitch expects government support to continue. Operationally, NYSI serves as a financing platform on behalf of the government, not only for managing development funds for Jiangbei, but also for public-housing projects across Nanjing. Weak Standalone Profile: As a public-sector entity, NYSI's financial profile is weak in view of its large debt-funded capital expenditure, negative free cash flow and high leverage, with total debt/total asset of 56% at end-2015. In view of ongoing infrastructure developments in Jiangbei New Area, NYSI will likely maintain a similar standalone profile over the medium term. Nevertheless, Fitch expects risks to be mitigated by ongoing financial support from the Nanjing government. RATING SENSITIVITIES Links with Municipality: A rating downgrade may stem from a weakening of NYSI's strategic importance to the municipality or shareholding dilution. A weaker fiscal performance or increased indebtedness of the municipality, leading to deterioration in the sponsor's internally assessed creditworthiness, may also trigger a downgrade, as NYSI is credit-linked with the municipality. An upgrade of Fitch's internal credit view assessment of Nanjing municipality, or stronger or more explicit support from the municipality, may trigger an upgrade of NYSI's ratings. Contact: Primary Analyst Samuel Kwok Associate Director +852 2263 9961 Fitch (Hong Kong) Limited 19/F Man Yee Building 68 Des Voeux Road Central, Hong Kong Secondary Analyst Terry Gao Senior Director +852 2263 9972 Tertiary Analyst Li Chen Analyst +86 21 5097 3009 Committee Chairperson Guido Bach Senior Director +49 69 768076 111 Date of relevant committee 21 March 2017 Media Relations: Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria International Local and Regional Governments Rating Criteria - Outside the United States (pub. 18 Apr 2016) here Rating of Public-Sector Entities – Outside the United States (pub. 22 Feb 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1021835 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT <a href="https://www.fitchratings.com">WWW.FITCHRATINGS.COM.. PUBLISHED RATINGS, CRITERIA, AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE, AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE CODE OF CONDUCT SECTION OF THIS SITE. DIRECTORS AND SHAREHOLDERS RELEVANT INTERESTS ARE AVAILABLE AT <a href="https://www.fitchratings.com/site/regulatory">HTTPS://WWW. FITCHRATINGS.COM /SITE/REGULATORY. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE. Copyright © 2017 by Fitch Ratings, Inc., Fitch Ratings Ltd. and its subsidiaries. 33 Whitehall Street, NY, NY 10004. Telephone: 1-800-753-4824, (212) 908-0500. Fax: (212) 480-4435. Reproduction or retransmission in whole or in part is prohibited except by permission. All rights reserved. In issuing and maintaining its ratings and in making other reports (including forecast information), Fitch relies on factual information it receives from issuers and underwriters and from other sources Fitch believes to be credible. Fitch conducts a reasonable investigation of the factual information relied upon by it in accordance with its ratings methodology, and obtains reasonable verification of that information from independent sources, to the extent such sources are available for a given security or in a given jurisdiction. The manner of Fitch’s factual investigation and the scope of the third-party verification it obtains will vary depending on the nature of the rated security and its issuer, the requirements and practices in the jurisdiction in which the rated security is offered and sold and/or the issuer is located, the availability and nature of relevant public information, access to the management of the issuer and its advisers, the availability of pre-existing third-party verifications such as audit reports, agreed-upon procedures letters, appraisals, actuarial reports, engineering reports, legal opinions and other reports provided by third parties, the availability of independent and competent third- party verification sources with respect to the particular security or in the particular jurisdiction of the issuer, and a variety of other factors. Users of Fitch’s ratings and reports should understand that neither an enhanced factual investigation nor any third-party verification can ensure that all of the information Fitch relies on in connection with a rating or a report will be accurate and complete. Ultimately, the issuer and its advisers are responsible for the accuracy of the information they provide to Fitch and to the market in offering documents and other reports. In issuing its ratings and its reports, Fitch must rely on the work of experts, including independent auditors with respect to financial statements and attorneys with respect to legal and tax matters. Further, ratings and forecasts of financial and other information are inherently forward-looking and embody assumptions and predictions about future events that by their nature cannot be verified as facts. As a result, despite any verification of current facts, ratings and forecasts can be affected by future events or conditions that were not anticipated at the time a rating or forecast was issued or affirmed. The information in this report is provided “as is” without any representation or warranty of any kind, and Fitch does not represent or warrant that the report or any of its contents will meet any of the requirements of a recipient of the report. A Fitch rating is an opinion as to the creditworthiness of a security. This opinion and reports made by Fitch are based on established criteria and methodologies that Fitch is continuously evaluating and updating. Therefore, ratings and reports are the collective work product of Fitch and no individual, or group of individuals, is solely responsible for a rating or a report. The rating does not address the risk of loss due to risks other than credit risk, unless such risk is specifically mentioned. Fitch is not engaged in the offer or sale of any security. All Fitch reports have shared authorship. Individuals identified in a Fitch report were involved in, but are not solely responsible for, the opinions stated therein. The individuals are named for contact purposes only. A report providing a Fitch rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Ratings may be changed or withdrawn at any time for any reason in the sole discretion of Fitch. Fitch does not provide investment advice of any sort. Ratings are not a recommendation to buy, sell, or hold any security. Ratings do not comment on the adequacy of market price, the suitability of any security for a particular investor, or the tax-exempt nature or taxability of payments made in respect to any security. Fitch receives fees from issuers, insurers, guarantors, other obligors, and underwriters for rating securities. Such fees generally vary from US$1,000 to US$750,000 (or the applicable currency equivalent) per issue. In certain cases, Fitch will rate all or a number of issues issued by a particular issuer, or insured or guaranteed by a particular insurer or guarantor, for a single annual fee. Such fees are expected to vary from US$10,000 to US$1,500,000 (or the applicable currency equivalent). The assignment, publication, or dissemination of a rating by Fitch shall not constitute a consent by Fitch to use its name as an expert in connection with any registration statement filed under the United States securities laws, the Financial Services and Markets Act of 2000 of the United Kingdom, or the securities laws of any particular jurisdiction. Due to the relative efficiency of electronic publishing and distribution, Fitch research may be available to electronic subscribers up to three days earlier than to print subscribers. For Australia, New Zealand, Taiwan and South Korea only: Fitch Australia Pty Ltd holds an Australian financial services license (AFS license no. 337123) which authorizes it to provide credit ratings to wholesale clients only. Credit ratings information published by Fitch is not intended to be used by persons who are retail clients within the meaning of the Corporations Act 2001

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below