S&P downgrades Zhongrong, debt to BB-

S&P said it lowered its long-term issuer credit rating on Zhongrong International Holdings Ltd. (Zhongrong BVI) to BB- from BB and affirmed the B short-term issuer credit rating.

The outlook is negative.

At the same time, the agency lowered the long-term issue rating on Zhongrong BVI's guaranteed debt to BB- from BB.

It also downgraded the Greater China regional scale ratings on the company to cnBB/cnB from cnBBB-/cnA-3 and on the notes to cnBB from cnBBB-.

All ratings were removed from CreditWatch, where they were placed with negative implications on April 25.

Zhongrong BVI is a British Virgin Islands-incorporated intermediate holding company under China-based Zhongrong International Trust Co. Ltd. (ZRITC).

"The downgrade reflects our assessment that extraordinary government support to Zhongrong BVI's parent company, through China Trust Industry's Security Fund (CTISF), is unlikely to extend to Zhongrong BVI," S&P credit analyst Harry Hu said in a news release.

This is because Zhongrong BVI's business mix is more weighted toward non-trust related businesses, which are not subject to China Banking Regulatory Commission regulations and the associated subscription to the security fund, the agency said.

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