Fitch Ratings has downgraded its local-currency credit rating on two state-backed power generators and three resources firms, a day after the rating agency's downgrade of a Chinese sovereign rating by one notch.
The agency yesterday said it had cut its long-term local-currency debt rating of China Guangdong Nuclear Power Holding, China National Petroleum Corp (CNPC) and China Petroleum & Chemical (Sinopec) to A-plus from AA-minus, that of China Yangtze Power to A-minus from A and Aluminum Corporation of China's rating to BBB-plus from A-minus.
The cuts came after it revised China's long-term local-currency debt rating to A-plus from AA-minus, citing much faster credit growth than gross domestic product growth since 2009.
Bond specialists said the downgrades have yet to result in higher debt funding costs.
Charles Feng, regional head of fixed-income trading at Standard Chartered Bank, said the reaction among investors had been subdued, as the downgrades have so far been by just one agency.
A bond market banker said CNPC's foreign-currency cost of funding had not been affected, as the downgrades were limited to local-currency credit ratings.
