/RATINGS: Moody's Investors Service says in...>

CHINA: /RATINGS: Moody's Investors Service says in a new report that "although

the coronavirus outbreak is credit negative for Chinese local government

financing vehicles (LGFVs), it does not pose immediate refinancing risk. "It's

possible that the coronavirus will delay or reduce the funding LGFVs receive

from their regional and local government (RLG) owners in the first half of this

year, given that the outbreak is likely to have a negative impact on the growth

of local economies and government revenues," says Sarah Xu, a Moody's Analyst.

"However, that doesn't mean that LGFVs' importance to RLGs will diminish. We

expect LGFVs will continue to receive government support, maintain their funding

access and benefit from credit easing measures," adds Xu. This is exemplified by

the fact that the central government has already introduced measures to help

RLGs mitigate the negative effects from the outbreak and ensure adequate

liquidity in financial markets, including a RMB1 billion special transfer to

Hubei province, the center of the outbreak, on 23 January 2020. Further, LGFVs

in general are not driven to maximize profits, and the majority of their cash

flow comes from the government."