S&P revises China Orient Asset view to stable

S&P said it revised the outlook on the long-term issuer credit ratings on China Orient Asset Management Co. Ltd., China Orient Asset Management (International) Holding Ltd., and Dongxing Securities Co., Ltd. to stable from positive.

Concurrently, S&P affirmed its BBB+ long-term on China Orient and Orient International and the BBB long-term issuer credit rating on Dongxing. The agency also affirmed the BBB+ issue credit rating on the senior unsecured notes and credit enhanced loan participation notes Orient International guarantees and the BBB issue rating on the senior unsecured notes Dongxing guarantees. Orient International is China Orient’s wholly owned subsidiary based in Hong Kong and Dongxing is its controlling China-based securities subsidiary.

“The outlook revision reflects our view that the improved leverage of China Orient's core distressed asset management unit alone is unlikely to be sufficient to raise the group's overall credit profile over the next 12–24 months,” said S&P in a press release.

“We expect the leverage ratio of China Orient's core business unit – as measured by adjusted debt to adjusted total equity (ATE) – to remain below 6.5x, the threshold for a moderate assessment, despite the company's strong initiatives to enhance its position in China's distressed asset management market,” the agency said.

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