S&P downgrades regional ratings on Shanghai Huayi

Standard & Poor’s said it revised the outlook on Shanghai Huayi (Group) Co. and its subsidiary, Huayi Group (Hong Kong) Ltd., to negative from stable.

The agency also said it lowered the long-term Greater China regional scale ratings on Shanghai Huayi to cnA- from cnA and on Huayi to cnBBB+ from cnA-.

S&P also said it affirmed the BBB long-term corporate credit rating on Shanghai Huayi and the BBB- long-term corporate credit rating on Huayi.

The agency also affirmed the BBB- long-term issue rating on the senior unsecured notes issued by Huayi Finance I Ltd. Huayi guarantees the notes, the agency said.

The Greater China regional scale ratings on the notes also were lowered to cnBBB+ from cnA-, S&P added.

The company is fully owned by the Shanghai municipal government, S&P said.

The outlook revision reflects Shanghai Huayi’s weak financial performance in 2015 and the possibility that the company’s profitability and cash flow will continue to deteriorate over the next 12 months, the agency said.

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