S&P lowers MIE Holdings

Standard & Poor’s said it lowered the corporate credit rating on MIE Holdings Corp. to B- from B, along with its senior unsecured debt to B- from B.

S&P also lowered the Greater China regional scale rating on MIE and its notes to cnB- from cnBB-.

All of the ratings were removed from CreditWatch due to the termination of a previously announced acquisition of Long Run Exploration.

The outlook is negative.

The downgrades reflect the reduced oil and natural gas price assumptions, which were recently lowered by 27% for 2016 and 31% for 2017, S&P said.

Lower price assumptions, coupled with a decline in MIE’s sales volume, will result in higher leverage in the next two years, the agency said.

MIE has a small production capacity and geographic concentration in China and Kazakhstan, S&P added.

Compared to peers, MIE is more vulnerable to falling oil prices due to its high cost of operations in Kazakhstan. Weak oil prices will likely pressure the company’s profitability, the agency said.

© 2015 Prospect News.
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