The Issuer Credit Rating reflects a high possibility that Zhejiang’s Shaoxing Municipal Government would provide strong support to SCIG if needed. This mainly considers the Shaoxing Municipal Government’s 90% ownership of SCIG, the high importance of SCIG to Shaoxing in the utilities (gas and water) infrastructures and services, as well as urban infrastructure and social-housing construction area, and the strong linkage between the Shaoxing Municipal Government and SCIG, including management supervision, ongoing operational and financial support. In addition, the Shaoxing Municipal Government may face significant negative impact on its reputation and financing activities should SCIG encounter any operational and financial difficulties.
The Stable Outlook reflects our expectation that SCIG’s strategic importance would remain intact while the Shaoxing Municipal Government will continue to ensure SCIG’s stable operation.