Lianhe Ratings Global Limited (“Lianhe Global”) has upgraded the global scale Long-term Issuer Credit Rating of Dongyang State-owned Assets Investment Co., Ltd. (“DSAI” or “the company”) to ‘BBB+’ from ‘BBB’; Issuer Rating Outlook Stable.
The Issuer Credit Rating upgrade reflects the increased strategic importance of DSAI in Dongyang City (“Dongyang”), as the company is expanding its range and extent of its investment in a variety of industries. It is aligned with the development plans of the People’s Government of Dongyang City (“Dongyang government”) and strengthen DSAI’s role in fostering consistent industrial growth in the region.
We believe there is a high possibility that the Dongyang government would provide very strong support to DSAI if needed. This mainly considers the Dongyang government’s indirectly full ownership of DSAI, DSAI’s strategic importance as the most important local investment and development company (“LIDC”) for state-owned assets operation and infrastructure construction in Dongyang City (“Dongyang”), and the strong linkage between the Dongyang government and DSAI, including appointment of the senior management, strategic alignment, supervision of major investment and financing plan decisions and ongoing operational and financial support. In addition, the Dongyang government may face significant negative impact on its reputation and financing activities if DSAI encounters any operational and financial difficulties.
The Stable Outlook reflects our expectation that DSAI’s strategic importance would remain intact while the Dongyang government will continue to ensure DSAI’s stable operation.