Hongqiao has announced a possible delay in the release of its 2016 annual report after suspension of auditing work; we see increasing risks to the company's financial reporting, transparency, and communication to external stakeholders. Hongqiao is applying for a waiver for its syndicated U.S. dollar loan, due to a potential event of default following the suspension of auditing work. The company's liquidity risk will heighten if the payment schedule accelerates for its significant U.S. dollar debt. We are lowering our long-term corporate credit rating on the China-based aluminum producer to 'B+' from 'BB-', and the issue ratings on the company's notes to 'B+' from 'BB-'. At the same time, we are placing all the ratings on the company and its
