S&P drops BW Group to junk

Standard & Poor's said it lowered the long-term corporate credit rating on BW Group Ltd. to BB+ from BBB- and its $500 million senior unsecured notes due June 2017 to BB+ from BBB-.

The outlook is stable.

"We expect the Bermuda-incorporated company's leverage to remain high and its deleveraging to take longer than expected under the ongoing global economic downturn," S&P analyst Manuel Guerena said in a statement.

Ratings reflect the company's high leverage and weak operating environment, the agency said, as well as its partial exposure to some of the more volatile segments of the business.

These factors are partially offset by the company's established market position and diversified earnings base, plus stable annual revenue $1 billion from long-term charter contracts, the agency noted.

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