S&P lowers China Overseas to negative

Standard & Poor’s said it revised the outlook on China Overseas Grand Oceans Group Ltd. to negative from stable.

The agency also said it affirmed the company’s BBB- long-term corporate credit rating and the BBB- long-term issue rating on the senior unsecured notes that it guarantees.

As a result of the outlook revision, the agency also said it lowered the company’s long-term Greater China regional scale ratings and on the notes to cnBBB+ from cnA-.

The outlook was revised to reflect an expectation that China Overseas’ profit margins will compress further and its leverage will remain high over the next 12 months, owing to oversupply in its markets, S&P said.

But, the company’s coverage ratios should continue to partly support its financial risk profile because of the company’s low funding costs, the agency said.

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