S&P lifts Neo-China Land

Standard & Poor's said it raised the long-term foreign currency corporate credit rating on Neo-China Land Group (Holdings) Ltd. to CC from SD and affirmed the C issue rating on Neo-China's $400 million 9¾% senior notes due 2014.

The actions reflect Neo-China's completion of a distressed exchange offer that changed the terms of the company's convertible bond due 2011, according to the agency.

"We believe there's a good chance that Neo-China should be able to fulfill its payment obligation on the CB, based on the current cash balance in its Hong Kong account. However, in our view, Neo-China's liquidity position continues to be vulnerable," S&P analyst Bei Fu said in a statement.

The rating also reflects Neo-China's deteriorating financial position, its limited financial flexibility and weak corporate governance measures, S&P said.

These weaknesses are slightly tempered by Neo-China's diversified and low-cost land bank, the agency noted.

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