China Huarong Asset Management’s credit rating was cut by Moody’s Investors Service to Baa2 from Baa1, and the borrower remains on watch for a potential further downgrade, reported Bloomberg.
The ratings company cited the deterioration of the asset manager’s capital and profitability after Huarong last week put its 2020 loss at nearly $16 billion. While a capital injection by a group of state-owned enterprises indicates Huarong’s systemic importance, the plan’s exact impact remains unclear, Moody’s analysts wrote in a report issued Monday.
Moody’s and Fitch Ratings downgraded the bad-asset manager in April and have had it on watch for further cuts since amid a lack of clarity over the extent of Beijing’s future support. S&P affirmed its BBB+ rating June 2 while keeping Huarong on watch for a possible downgrade.
You must log in to post a comment.