Standard & Poor's Ratings Services said April 1 that itrevised the CreditWatch placement on the ratings of China Cinda (HK) HoldingsCo. Ltd. to developing implications from negative implications, while parentChina Cinda Asset Management Co.Ltd. remains on CreditWatch with negative implications.
S&P said the revision on China Cinda (HK)'s CreditWatchplacement reflects the possibility of the unit becoming a core subsidiary givena planned US$3 billion capital injection from its parent company. The revisionalso reflects the downward rating pressure on the group.
Meanwhile, China Cinda Asset Management's CreditWatchplacement reflects the one-off hit to its capitalization from the substantialgoodwill that will be created after it completes its of
S&P expects to resolve the CreditWatch placements afterthe group completes its acquisition of Nanyang Commercial Bank. The ratingagency said it could downgrade China Cinda Asset Management's rating by onenotch if it does not devise a feasible capital plan to replenish itscapitalization against a backdrop of the transaction's potential businesssynergies and risk diversification. The company's ratings could be affirmed ifit does restore its capital strength with a feasible capital plan and businessgrowth strategy over the next two years.
China Cinda (HK)'s ratings will likely be downgraded ifS&P does not view it as a core subsidiary of the group and China CindaAsset Management is downgraded. The ratings could be affirmed if the company isviewed as a core subsidiary and China Cinda Asset Management is downgraded byone notch. An upgrade of China Cinda (HK)'s ratings is likely if the ratingagency views it as a core subsidiary of the group and resolves the CreditWatch,while at the same time, affirming China Cinda Asset Management's ratings.
S&P's recent downgrade of the outlook on China is not expected to addpressure on the two companies' ratings.
S&P Ratings andS&P Global Market Intelligence are owned by McGraw Hill Financial Inc.