We have equalized our 'A-' corporate credit rating on Bao-Trans Enterprises Ltd. with the rating on the company's parent Baoshan Iron&Steel Co. Ltd. (A-/Stable/--; cnAA/--). We believe Bao-Trans is likely to indirectly benefit from extraordinary government support to Baoshan. We apply a "top-down" approach while assessing the parent-subsidiary link between Baoshan and Bao-Trans. We view Bao-Trans as a "core" subsidiary of Baoshan because we believe the two entities are strategically, financially, and operationally integrated. Our approach is based on the following key considerations: Bao-Trans is Baoshan's only wholly owned offshore platform to procure, finance, and ship iron ore. We expect Baoshan to maintain its 100% ownership of Bao-Trans. Procurement of iron ore is a key cost for steelmakers.
