S&P lowers GITI Tire

Standard & Poor's said it lowered the long-term corporate credit rating on GITI Tire Pte. Ltd. to B from B+ and its $200 million 12¼% senior secured notes due 2012 to CCC+ from B-. Both ratings were removed from CreditWatch, where they had been placed with negative implications on Sept. 15.

The outlook is stable.

"We lowered the ratings on GITI and the notes to reflect the company's prolonged period of weak performances and its high vulnerability to industry risks. While GITI's margins have improved since the second quarter of this year, such improvements may not be sustainable, in our view," S&P analyst Bei Fu said in a statement.

The company's ratio of debt to EBITDA could be at or below 5x in 2009, S&P said.

"The rating on GITI reflects the industry risks and the company's highly leveraged financial risk profile, which takes into account its volatile operating margin, weak cash flow protection, high leverage and tight liquidity," Fu said.

"These weaknesses are tempered by GITI's leading market position in China and improving geographic diversity," Fu noted.

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