S&P cuts Stena to negative

Standard & Poor's said it revised the outlook on Stena AB to negative from stable.

The agency also said it affirmed the BB+ rating on Stena's unsecured notes. The recovery rating on the debt remains unchanged at 4.

The outlook revision reflects Stena's performance in 2010 and the first quarter of 2011, which was weaker than expected, S&P said.

Together with Stena's high debt levels, this weakened the group's credit ratios beyond the levels expected for the current rating, the agency said.

The group has no contract in place for one drilling ship currently on order, which is viewed negatively, S&P said.

The group's weak operating results are predominantly explained by weakening profitability at ferry unit Stena Line and the group's shipping division, the agency said.

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