Moody's reviews Bluestar for downgrade

Moody's Investors Service said it placed China National Bluestar (Group) Co., Ltd.'s (Bluestar) Baa2 issuer rating on review for downgrade. The agency also plans to review Bluestar Finance Holdings Ltd.’s ratings, including its Baa3 rated backed subordinated securities.

"The review for downgrade reflects Bluestar's sharply increased leverage and our concern that the leverage will remain high over the next one to two years, driven by significant earnings reduction amid challenging chemical industry conditions, which pressure its standalone credit profile at the current level," said Gerwin Ho, a Moody's vice president and senior credit officer, in a press release.

Moody’s noted Bluestar’s total revenue and EBITDA fell by 17% and more than 60%, respectively, for the first nine months of 2023 compared to the same period in 2022. Additionally, Bluestar’s Moody's-adjusted debt/EBITDA rocketed to more than 12x over the last 12 months (LTM) ended September 2023, from 4.8x in 2022.

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