Fitch Ratings has downgraded the Long-Term Foreign-Currency Issuer Default Ratings (IDR) on
Fitch has subsequently withdrawn all the ratings.
The downgrades follow Redsun's announcement on
Redsun and Hong Yang have not provided further information to Fitch beyond their public announcements.
Fitch is withdrawing the ratings as Hong Yang and Redsun have chosen to stop participating in the rating process. Therefore, Fitch will no longer have sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for Hong Yang and Redsun.
Key Rating Drivers
Non-Payment of Bond Interest: Redsun said on 11 August that it did not make the interest payment due on its 2025 notes and it does not expect to repay the interest by the expiry of the grace period on 12 August. The missed payment does not yet constitute an event of default due to the grace period, but Fitch believes a default-like process has begun.
Cross Default with Hong Yang's Bond: Fitch believe Redsun's non-payment of the interest upon expiry of the grace period will trigger an event of default for Hong Yang's US dollar bonds, which were issued by
Uncertainties over Restructuring Plan: Redsun and Hong Yang have appointed financial advisors and legal advisors to communicate with offshore bondholders, according to the announcement on 11 August. There is limited information on the companies' restructuring plan at this stage.
RATING SENSITIVITIES
No longer relevant, as the ratings have been withdrawn.
Best/Worst Case Rating Scenario
International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from '
Issuer Profile
Hong Yang owns 72% of
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
Following the withdrawal of ratings for Hong Yang and Redsun, Fitch will no longer be providing the associated ESG Relevance Scores.
RATING ACTIONS
Entity / Debt
Rating
Recovery
Prior
LT IDR
WD
Withdrawn
C
LT IDR
C
Downgrade
CC
senior unsecured
LT
WD
Withdrawn
C
senior unsecured
LT
C
Downgrade
RR4
CC
senior unsecured
LT
WD
Withdrawn
C
senior unsecured
LT
C
Downgrade
RR4
CC
LT IDR
WD
Withdrawn
C
LT IDR
C
Downgrade
CC
senior unsecured
LT
WD
Withdrawn
C
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VIEW ADDITIONAL RATING DETAILS
Additional information is available on www.fitchratings.com
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