Moody’s revises Citic Resources to negative

Moody's Investors Service said it changed the outlook for Citic Resources Holdings Ltd.’s Ba3 corporate family rating to negative from stable and affirmed the rating.

"The change in the rating outlook to negative reflects the weakening performance of the company's exploration & production (E&P) businesses and its deteriorating credit metrics in view of the persistency of the low oil price environment," Joe Morrison, Moody's vice president, senior credit officer and international lead analyst for Citic Resources, said in a news release.

Moody's has concerns that Citic Resources' credit metrics will likely deteriorate further in 2016.

Accordingly, adjusted debt/EBITDA will increase to a high level of around 20 times and adjusted EBITDA/interest will fall to 1 time from 15 times and 1.5 times, respectively, in 2015 on the expectation of continued low oil prices and the absence of any recovery in its commodity export business in the next 12 to 18 months, the agency said.

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