S&P downgrades Elion

S&P said it lowered the long-term issuer credit rating on Elion Resources Group Co. Ltd. to B- from B.

The outlook is negative.

The agency also said it downgraded Elion Resources because the company is facing a significant liquidity deficit over the next year due to its large short-term debt maturities.

Elion Resources also has limited refinancing options and relies on rollover of loans, S&P added.

The company's debt structure continues to skew heavily toward the short-term, the agency noted.

Elion Resources has RMB 18.6 billon debt due in the 12 months that ended Sept. 30, 2019, accounting for about 60% of its total debt, S&P said.

This figure includes two bonds totaling RMB 3.1 billion that are due in 2020 and 2021, but have put options that can be exercised in March 2019, the agency explained.

About half of the company's short-term debt is bank borrowings, which are expected to be renewed at maturity.

But it is not clear whether the trust loans or financial leases can be similarly rolled over, S&P said.

Elion also could find it difficult to raise new debt under the current tight funding environment in China, the agency added.

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