Moody’s may lower Cofco (Hong Kong)

Moody's Investors Service said it placed under review for downgrade the A3 issuer rating of Cofco (Hong Kong) Ltd., along with the A3 rating of the senior unsecured bonds issued by Prosperous Ray Ltd.

The review for downgrade follow news that parent company Cofco Corp. plans to acquire the remaining share of Nidera Capital BV that it does not already own.

Cofco (Hong Long) is a core subsidiary of Cofco, which is in turn 100% owned by the Government of China, the agency said.

Moody’s said it is concerned that Cofco (Hong Kong)’s acquisition of the remaining stake in Nidera could increase its debt leverage and increase its exposure to Nidera's weak commodity trading businesses, which will in turn weaken the company's standalone credit strength.

Nidera has a weak credit profile, high leverage and thin profit margin, the agency said.

Nevertheless, the acquisition will enable Cofco (Hong Kong) to command strong control of the subsidiary and expedite the integration between Nidera and rest of its commodity trading businesses, Moody’s said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.