S&P cuts Lumena outlook to negative

Standard & Poor's said it revised the outlook on Lumena Resources Corp. to negative from stable.

At the same time, S&P said it affirmed its BB- long-term corporate credit rating on Lumena and the BB- issue rating on the company's $250 million callable senior unsecured notes due 2014.

The agency said it revised the outlook to negative following Lumena's announcement that its major shareholder and chairman, Suolang Duoji, has charged about 20.51% of the company's total issued share capital to Bank of China International as security for a loan facility.

"In its view, Lumena's credit risk profile could come under further pressure if the chairman continues to utilize financing avenues that have a financial and operational impact on the company - including increasing dividends and loans to shareholders - and such actions may lead us to lower the rating on Lumena," said S&P credit analyst Judy Kwok-Cheung.

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