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S&P downgrades Zoomlion
S&P said it lowered the long-term corporate credit rating on Zoomlion Heavy Industry Science and Technology Co. Ltd. to B from B+.
The agency also said it lowered the long-term issue ratings to B from B+ on the $400 million 6 7/8% senior unsecured notes due 2017 and the $600 million 6 1/8% senior unsecured notes due 2022 issued by Zoomlion H.K. SPV Co. Ltd.
Zoomlion guarantees the notes, S&P said.
S&P also said it lowered the company’s long-term Greater China regional scale rating to cnB+ from cnBB- and its guaranteed notes to cnB+ from cnBB-.
The outlook is negative.
The downgrades reflect an expectation that the company's interest-serving capacity will deteriorate in the next 12 months, S&P said.
Zoomlion's business profitability also is expected to weaken because of declining revenue from sluggish demand in the construction-machinery sector and the company's high fixed-cost structure, the agency said.
But the company's cost-reduction efforts should partially offset some of the pressure on its top line, S&P added.
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