[ET Net News Agency, 6 December 2019] S&P Global Ratings today lowered its long-term
issuer credit rating on Yida China Holdings Ltd. (03639) to 'CCC-' from 'CCC'. At the same
time, it lowered its long-term issue rating on the company's senior unsecured notes to
'CC' from 'CCC-'.
The negative outlook on Yida reflects the possible non-payment of its offshore senior
notes due April 2020.
S&P believes a default or distressed exchange is highly likely within the next six
months, absent significantly favorable changes in Yida's circumstances. Yida may face
difficulty in repaying its US$300 million offshore senior notes due April 2020.
With unrestricted cash of only RMB1 billion (US$142 million) as of 30 September 2019 and
unlikely new offshore issuance given its weak credit profile, the company is relying on
other options, such as other new borrowings, cash collection from contracted sales and
asset disposals, to repay the maturing notes.
In addition, the company's parent, China Minsheng Investment Group Corp. Ltd. (CMIG), is
in discussion to sell its stake in Yida to a third party, which will likely improve the
credit access of Yida. However, these options are under discussion, and the agency
believes the execution risk makes timely repayment highly uncertain. (KL)