Fitch affirms Sino-Forest

Fitch Ratings said it affirmed Sino-Forest Corp.'s long-term foreign-currency issuer default rating at BB+ and foreign-currency senior unsecured rating at BB+.

The outlook is stable.

The affirmation of Sino-Forest's ratings reflects the company's stable business profile underpinned by a solid plantation asset base, adequate corporate liquidity and sound credit metrics, the agency said.

However, Sino-Forest's ratings are constrained by its persisting negative free cash flow due to significant capex, the agency added.

The ratings consider favorable industry dynamics driven by supportive government policies and the domestic wood-fiber supply shortage as well as its management's solid experience in forestry management with strong business and government relationships in China, Fitch said.

The ratings are constrained by the long-term nature of Sino-Forest's timber inventories, which exposes the company to price risk and cash margin compression, Fitch added.

© 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.