S&P downgrades Asciano

S&P said it lowered the long-term corporate credit rating and senior unsecured debt ratings on Asciano Ltd. to BBB- from BBB.

The agency also said it removed the ratings from CreditWatch with negative implications, where they were initially placed in January.

The outlook is stable.

The downgrades reflect a view that Asciano's business diversification will reduce following the planned divestment of the ports business, which is likely to occur in the coming weeks, S&P said.

The company’s operations will be solely focused on the Pacific National rail business following the divestment, the agency explained.

Due to the reduction in the company's diversity and because the proceeds of the sale will be returned to shareholders, Asciano's key ratio of funds from operations-to-debt will remain in the range of 15% to 20%, S&P said.

But Asciano's new owners have communicated a clear commitment to implement financial policies that will support a long-term investment-grade rating on the company, the agency said.

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