Moody's downgrades Li & Fung

Moody's Investors Service said it cut Li & Fung Ltd.’s corporate family rating and senior unsecured bond ratings to Ba1 from Baa3.

The agency also downgraded to provisional (P)Ba1 from (P)Baa3 its senior unsecured medium-term note program rating, its preferred stock MTN program rating (P)Ba3 from (P)Ba2, and to Ba3 from Ba2 its subordinated perpetual capital securities rating.

Moody's said it concurrently revised the outlook to stable from ratings under review. This concludes the review for downgrade started on Sept. 5.

"The rating downgrades reflect the company's reduced business diversity and earnings base after the sale of its logistics segment, despite a significant reduction in its net debt levels," said Gloria Tsuen, a Moody's vice president and senior credit officer, in a press release.

The outlook reflects the forecast that Li & Fung’s trading business will continue to improve, and the company will keep its balance sheet solid and strong liquidity, the agency said.

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