S&P turns Zhongrong view to negative

S&P said it revised Zhongrong International Holdings Ltd.’s (ZRH) outlook to negative from stable and affirmed its BB- ratings. The company is a unit of Zhongrong International Trust Co. Ltd.

“We revised the outlook on ZRH to negative to reflect the company's heightened investment risk, persistently weak liquidity, and slow development of the asset management business,” the agency said in a press release.

S&P said it forecasts tougher market conditions to add to the company's investment risk.

“Rising interest rates also continue to put pressure on ZRH's overall performance. This is because the company's funding costs could heighten, and longer-dated assets could be repriced at a lag or be renegotiated at a lower margin. In addition, higher interest rates could hurt the credit risk and valuation of ZRH's bond investments,” the agency said.

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