S&P rates Ocean Grand notes BB-

Standard & Poor's said it assigned a BB- corporate credit rating to Hong Kong's Ocean Grand Holdings Ltd. and a BB- rating to the company's proposed senior unsecured notes of up to $125 million with a maturity of five to seven years.

The outlook is stable.

The proposed bond issue will be used primarily to refinance existing debt.

The ratings reflect the fierce market competition, low entry barriers and intense pricing pressure in the highly fragmented aluminum extrusion business in China, the agency said.

They also take into consideration the execution risks associated with the company's capacity expansion plan and the fact that it operates on a smaller scale than leading global peers.

S&P said these negative factors are partly offset by Ocean Grand's competitive position in the Chinese aluminum extrusion and electroplating chemicals sector and good market growth prospects. The company also has a lower cost structure than its peers in the United States and Europe.

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