(Bloomberg) -- A local state-owned company in China’s Inner Mongolia, a region that recently admitted having inflated key economic data, has suffered a credit rating downgrade.
Fitch Ratings cut Inner Mongolia High-Grade Highway Construction and Development Co.’s long-term foreign- and local-currency issuer default rating to BBB- from BBB, citing the local government’s revision of its fiscal figures, according to a statement late Thursday. That follows its downgrade of an internal assessment of the creditworthiness of the Inner Mongolia region, the statement said.
Investors are growing more concerned about local credit risks as the government steps up efforts to curb leverage and two regions have admitted faking data. The northeastern province of Liaoning said last year that it had fabricated fiscal numbers from 2011 to 2014. Earlier this week, a local trust loan company delayed payments to investors on products tied to local borrowings in the southwestern province of Yunnan, people familiar with the matter said.
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Inner Mongolia High-Grade Highway issued $400 million of three-year bonds in the offshore market last year. The price of those securities fell 0.4 cent, the biggest decline since issuance, to 99 cents as of 11:45 a.m. in Hong Kong, according to data compiled by Bloomberg.
Inner Mongolia on Jan. 3 revised down its 2016 general public budget revenue by 26 percent, or 53 billion yuan. It also cut its 2017 general public budget revenue guidance by 17 percent, according to Fitch.
Fitch said the downgrade of its internal assessment of the region’s creditworthiness takes into account the weak internal governance in the autonomous region.
©2018 Bloomberg L.P.
With assistance from Judy Chen