S&P downgrades Chalco

Standard & Poor's said it lowered the foreign-currency long-term corporate credit rating on Aluminum Corp. of China Ltd. (Chalco) to BBB from BBB+ after lowering its stand-alone credit profile to BB from BB+.

The outlook is negative.

S&P also said it lowered its Greater China credit scale rating to cnA-/-- from cnA+/--.

The downgrades reflect the company's worse-than-expected financial performance in the fourth quarter of 2011 and a view that aluminum prices are likely to remain subdued in 2012 due to uncertainty in the global economy, S&P said.

As Chalco's production costs remain high, the agency said it sees little likelihood that the company will be able to improve its cash flow coverage measures or reduce its high debt levels while its profitability remains low.

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