(Bloomberg) — A benchmark for Chinese publicly traded tutoring companies suffered a credit drop following a recent crackdown on the country’s private tutoring companies.
The score of New Oriental Education & Technology Group Inc. was lowered from Baa1 to Baa3 by Moody’s Investors Service on Tuesday. Baa3 is the lowest investment-grade rating, just one step away from the rating agency’s junk territory.
China unveiled curbs this weekend that prohibits companies that teach school curricula from making a profit, raising capital or going public — a sweeping crackdown on such companies that counted the country’s big companies as investors. The move contributed to a sell-off in several asset classes in Asian financial markets this week.
“The downgrade to Baa3 reflects New Oriental’s significantly weaker business profile as a result of regulatory change and implementation, which could significantly worsen its business model, operations, business expansion and ability to raise capital,” Moody’s said in a statement. a statement.
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