S&P downgrades Li & Fung

Standard & Poor's said it lowered the long-term corporate credit rating on Li & Fung Ltd. to BBB+ from A-, along with the rating on the company's outstanding senior unsecured notes to BBB+ from A-.

The outlook is stable.

The agency also said it lowered the rating on Li & Fung's outstanding hybrid securities to BBB- from BBB, along with the long-term Greater China regional scale rating on the company and its senior notes to cnA+ from cnAA- and on the hybrid securities to cnA- from cnA.

The ratings were removed from CreditWatch, where they were placed with negative implications in January.

S&P said it downgraded Li & Fung because it does not expect the company's financial strength to be restored to a level that supports an A- rating.

The agency said it anticipates that Li & Fung's execution of its aggressive expansion strategy for its distribution segment will be weak over its three-year plan for 2011 to 2013.

The growth in the company's trading and logistics segments also will likely be weaker than the three-year target, S&P said.

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