S&P downgrades Far EasTone

Standard & Poor’s said it lowered the long-term corporate credit rating on Far EasTone Telecommunications Co. Ltd. to BBB from BBB+.

The agency also said it lowered the long-term Greater China regional scale rating on the company to cnA from cnA+.

The outlook is stable.

The downgrades reflect the weakened credit profile of Far EasTone’s parent, Far Eastern New Century Corp., S&P said.

This is based on an expectation that Far Eastern New Century’s ratio of debt-to-EBITDA will remain at more than 4x over the next two years as a result of higher capital expenditures in 2015, the agency said.

Far EasTone continues to be assessed as an insulated and strategically important subsidiary of the parent group, S&P said.

The rating on Far EasTone is capped at one notch above the parent group credit profile given that Far EasTone is a highly independent entity in respect of its financial performance, funding prospects and corporate documents, the agency added.

Far EasTone does not co-mingle its funds, other assets, liabilities or cash flows with those of any other group entity, S&P said.

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