More companies in China will lose their investment-grade ratings following a record number of credit outlook downgrades, Bloomberg News reported on Tuesday, citing an analyst with Haitong Securities Co. Ltd. (06837.HK, 600837.CN). A total of 152 credit ratings or outlooks were cut in the nine months to September, exceeding 73 for the whole of 2012, data from Haitong, the country’s second-biggest brokerage, showed. The yield on Anyang Iron & Steel Co. Ltd.’s (600569.CN) 2019 notes has jumped 396 basis points to 10.8 percent since China Chengxin Securities Rating Co. Ltd. reduced its rating to AA-minus from AA on June 28, the news agency reported. There is an increased chance that more credit ratings will be cut and those companies’ bond yields will rise above 10 percent, Li Ning, a Shanghai-based bond analyst at Haitong Securities, was quoted as saying. Investors are demanding higher yields to buy lower-rated debt after Beijing ordered 1,400 companies in 19 industries including steel to cut capacity, the report said.
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