Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Credit Rating of Chengdu Dujiangyan Investment Development Group Co., Ltd. (“DIDG” or “the company”) to ‘BBB+’ from ‘BBB-’; Issuer Rating Outlook Stable.
The Issuer Credit Rating upgrade reflects an upgrade in our internal credit assessment on the People’s Government of Dujiangyan City (“Dujiangyan government”) and the expectation of a high possibility that the Dujiangyan government would provide very strong support to DIDG if needed. It also reflects the increased strategic importance of DIDG in Dujiangyan City (“Dujiangyan”), as the company is expanding its range and extent in urban and rural construction, trade, tourism and industrial development, which is aligned with the development plans and policies of the Dujiangyan government and strengthen DIDG’s role in urban and rural construction as well as promoting the economic and industrial development of Dujiangyan.
We believe there is a high possibility that the Dujiangyan government would provide very strong support to DIDG if needed. This mainly considers the Dujiangyan government’s full ownership of DIDG, DIDG’s strategic importance as the sole local investment and development company (“LIDC”) for infrastructure construction and urban operation in Dujiangyan, and the strong linkage between the Dujiangyan government and DIDG, including control of the board of directors, appointment and supervision of the senior management, strategic alignment, major investment and financing plan decisions and ongoing government support. In addition, the Dujiangyan government may face significant negative impact on its reputation and financing activities should DIDG encounter any operational or financial difficulties.
The Stable Outlook reflects our expectation that DIDG’s strategic importance would remain intact while the Dujiangyan government will continue to ensure DIDG’s stable operation.