Fitch rates China Shanshui notes BB

Fitch Ratings said it has assigned China Shanshui Cement Group Ltd.'s (BB/negative) proposed dollar senior unsecured notes an expected rating of BB(exp). The notes will be issued by Shanshui and guaranteed by Shanshui's subsidiaries incorporated or organized outside of China, except for a subsidiary organized in the United States.

Shanshui said it plans to use the proceeds of the proposed notes to redeem its outstanding $400 million of 8˝% notes due May 2016.

The notes are rated at the same level as Shanshui's senior unsecured debt rating as they represent direct, unconditional, unsecured and unsubordinated obligations of the company, Fitch stated.

Key rating drivers include the company’s slower deleveraging progress as sluggish cement average selling prices in Shanshui's main markets resulted in weaker cash flow generation in 2014 than one year ago.

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