Research Update: Beijing Infrastructure Investment Rating Affirmed; Outlook Stable; SACP Revised Up On Strong Ongoing Government Support

The revision to the authorize, build, and operate (ABO) agreement between the Beijing municipal government and Beijing Infrastructure Investment Co. Ltd. (BII) indicates a strengthening of the government's ongoing support to the company, in our view. The annual subsidies the company received in 2021 rose following a review of the ABO in 2021, and we expect the trend to continue after reviews every five years. The ABO contracted amount received fully covers BII's operating loss associated with its metro assets and part of its interest expenditure. This is despite the company's high leverage. We have revised upward our assessment of BII's stand-alone credit profile (SACP) by one notch to 'bb' from 'bb-'. We continue to see an almost-certain likelihood that

...- The revision to the authorize, build, and operate (ABO) agreement between the Beijing municipal government and Beijing Infrastructure Investment Co. Ltd. (BII) indicates a strengthening of the government's ongoing support to the company, in our view. The annual subsidies the company received in 2021 rose following a review of the ABO in 2021, and we expect the trend to continue after reviews every five years. - The ABO contracted amount received fully covers BII's operating loss associated with its metro assets and part of its interest expenditure. This is despite the company's high leverage. - We have revised upward our assessment of BII's stand-alone credit profile (SACP) by one notch to '##' from '##-'. We continue to see an almost-certain likelihood that the Beijing municipal government would provide timely extraordinary support to BII, if needed. We therefore continue to equalize our rating on BII with that on the municipal government. - On Oct. 19, 2023, S&P Global Ratings affirmed...

Research Update