Beijing Infrastructure Investment Co. Ltd.

The stable outlook on BII reflects our view that the creditworthiness of the Beijing government is stable. We expect the likelihood for BII to receive extraordinary support from the government to stay almost certain because of the company's critical role in executing Beijing's long-term urban transport development plan and its status as a public service provider. The stable outlook on Beijing Infrastructure Investment (Hong Kong) Ltd. (BIIHK) reflects the stable outlook on parent BII. The rating on BIIHK will move in tandem with that on BII--with a one-notch difference. This reflects our view of BIIHK's position as a highly strategic subsidiary of the group, and our top-down rating approach for BIIHK. We may lower the rating on BII if we

...We anticipate Beijing municipal government's creditworthiness will remain strong. Beijing is one of the wealthiest and most developed cities in China, benefiting from its political status as the capital city and its fast-growing services sector. Beijing's track record of strong political leadership and prudent fiscal and debt planning, along with gradually improving disclosure and transparency, will continue to help the city maintain moderate deficits in a volatile fiscal environment. While we expect the city's debt level to rise to finance large projects in transportation infrastructure and social welfare, Beijing's high internal cash reserves and strong access to the domestic bond market will help ensure sufficiently high coverage of upcoming debt-servicing needs. We expect Beijing Infrastructure Investment Co. Ltd. (BII) to maintain an almost certain likelihood of receiving extraordinary government support.BII plays an important role in executing Beijing's long-term rail transit system...

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