(Adds Fitch rating watch, bond price) SHANGHAI, Aug 24 (Reuters) - Moody’s Investor Service on Monday cut credit ratings for Chinese state-owned asset manager China Huarong Asset Management Co, citing the company’s warning that it expects to book a net loss of nearly $16 billion for 2020. Huarong said last week its 2020 net loss would be 102.9 billion yuan ($15.88 billion), due to what it said was a large change in provision for credit impairment, and said a state consortium led by the Citic Group Corp had agreed to make a strategic investment in the company. The company, one of four debt collectors created by China’s Finance Ministry in 1999 to process bad loans made by China’s biggest banks, had missed a March 31 deadline for filing its 2020 earnings, sparking a rout in its U.S. dollar-denominated bonds that spread to other Chinese issuers. In a statement late on Monday, Moody’s said it had downgraded Huarong’s local and foreign currency long-term issuer ratings by one notch to Baa2 from Baa1. The ratings remain on review for further downgrades, it said. Moody’s also downgraded the long-term backed senior unsecured debt ratings for Huarong’s offshore financing vehicles by one notch to Baa3 from Baa2. Baa3 is the lowest investment-grade rating on the Moody’s long-term issuer rating scale. “Today’s rating actions reflect the deterioration of Huarong AMC’s capital and profitability due to large amounts of net losses incurred in 2020 ... Such net losses could result in a failure to comply with the minimum regulatory requirements on capital adequacy and leverage, and indicate that the company cannot sustain its operation without support arranged by the government,” Moody’s said. Fitch Ratings, in contrast, said late on Monday that it had raised its rating watch on Huarong’s long-term issuer default rating, and notes issued by its subsidiaries, to positive from negative, based on the company’s recapitalisation plan. “We regard the plan as a step towards the company alleviating its financial stress amid its expected net loss, and believe it reduces the uncertainty that we captured in the Rating Watch Negative previously,” Fitch said. Bids on a 4% Huarong perpetual bond issued by Huarong Finance 2017 Co Ltd slipped about two-tenths of a cent to 92.687 cents on Tuesday, according to data provider Duration Finance. $1 = 6.4805 yuan Reporting by Andrew Galbraith; Editing by Kenneth Maxwell Our Standards: The Thomson Reuters Trust Principles.