Moody's trims Kunming Construction

Moody's Investors Service said it downgraded to Ba2 from Ba1 the corporate family rating of Kunming Municipal Urban Construction Investment & Development Co., Ltd. and the senior unsecured rating on the bonds it sold. Moody's also changed the rating outlook to stable from negative.

"The downgrade reflects our expectation that Kunming Construction's access to funding and efforts to replace non-standard financings with bank loans and bonds continues to be hindered by investor heightened risk aversion in some regions in China. As such, the company is unlikely to significantly reduce its reliance on non-standard financings in next 12 months and therefore unlikely to improve its credit profile commensurate with a Ba1 rating," said Ying Wang, a Moody's vice president and senior analyst, in a press release.

The outlook reflects the stable outlook on China’s sovereign rating, Moody’s said.

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