S&P downgrades Citic

Standard & Poor’s said it lowered the long-term issuer credit rating on Citic Securities Co. Ltd. and its core subsidiary Citic Securities International Co. Ltd. to BBB from BBB+.

The outlook is negative.

The agency also said it affirmed the A-2 short-term rating on both companies.

S&P also said it lowered the Greater China regional scale ratings for both companies to cnA- and cnA-2 from cnA+ and cnA-1.

The agency also said it lowered all of the related issue ratings on Citic’s debt, except the $800 million bonds that are supported by Bank of China Ltd.’s standby letter of credit.

The downgrades reflect the turmoil in China’s equity market and related events, which have weakened the company’s business position and reduced its capital strength, the agency said.

The negative impact of these factors on the company’s stand-alone credit profile more than offsets the one-notch rating uplift for an assessment of a moderate likelihood that Citic would receive extraordinary government support, if needed, S&P said.

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