Fitch cuts Kunming Urban

Fitch Ratings said it trimmed Kunming Municipal Urban Construction Investment & Development Co., Ltd.'s foreign- and local-currency issuer default ratings to BB from BB+. Fitch also downgraded the rating on the company’s $500 million of 5.8% senior unsecured notes due 2022 to BB from BB+. The agency removed the ratings from rating watch negative.

Fitch placed the ratings on RWN on July 13, after a portfolio review of Chinese government-related entities. The RWN reflected a potential reassessment of the financial implications of default attribute under Fitch's government-related entities rating criteria, the agency said.

“The downgrade comes after Fitch lowered the financial implications of default to 'moderate' from 'strong' to reflect our belief the company has experienced some difficulties in accessing capital-market debt due to the deterioration of the credit profiles of similar entities. The deterioration in financing capacity or financing resilience may weaken the financial implications of default for its sponsoring government or other GREs under the same sponsor,” Fitch said in a press release.

The outlook is stable.

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