S&P downgrades Ranhill

Standard & Poor's said it lowered the long-term corporate credit rating on Ranhill Bhd. to B- from B, along with the rating on its $220 million of 12½% senior unsecured notes due October 2011 issued by Ranhill (L) Ltd. to CCC+ from B-.

Ranhill guarantees the notes.

Both the ratings remain on CreditWatch, where they were placed with negative implications in December.

The downgrade was due to the company's weak liquidity and the recent political instability in Libya, which heightens the company's refinancing risk and weakens its business risk profile, S&P said.

Since the start of the political turmoil in Libya, Ranhill has evacuated more than 2,600 workers from the Tajura Housing project and suspended work, the agency said. The project accounts for the majority of the company's order book.

S&P said it expects delays and disruptions, including possible write-offs and payment delays due to the uncertainty on the project. The agency said it believes these issues would further increase the refinancing risk on the $220 million guaranteed notes.

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