Research Update: The Development Corp. of Yangzhou Economic and Technological Development Zone Assigned 'BB+' Rating With Stable Outlook

We see an extremely high likelihood that YETDZ Dev. Corp. will receive timely and sufficient extraordinary government support if needed, given the company's development mandate in the E&T zone. Accordingly, the creditworthiness of the Yangzhou municipal government is the main driver of rating on the company. YETDZ Dev. Corp. has substantial financial leverage, weak cash flow generation, material working capital needs, as well as a small and concentrated business scale. These factors underpin the company's 'b-' SACP. The SACP also incorporates the risk associated with its role to provide financial intermediation and third-party guarantees to other Yangzhou SOEs. On June 14, 2019, S&P Global Ratings assigned its 'BB+' long-term issuer credit rating to YETDZ Dev. Corp. The stable outlook on

...- We see an extremely high likelihood that YETDZ Dev. Corp. will receive timely and sufficient extraordinary government support if needed, given the company's development mandate in the E&T zone. Accordingly, the creditworthiness of the Yangzhou municipal government is the main driver of rating on the company. - YETDZ Dev. Corp. has substantial financial leverage, weak cash flow generation, material working capital needs, as well as a small and concentrated business scale. These factors underpin the company's 'b-' SACP. The SACP also incorporates the risk associated with its role to provide financial intermediation and third-party guarantees to other Yangzhou SOEs. - On June 14, 2019, S&P Global Ratings assigned its '##+' long-term issuer credit rating to YETDZ Dev. Corp. - The stable outlook on YETDZ Dev. Corp. reflects our view of the stable credit profile of the Yangzhou municipal government, and an extremely high likelihood of extraordinary government support to the company over the...

Research Update