S&P lowers Swire Pacific view to negative

S&P said it revised the outlook on Swire Pacific Ltd. to negative from stable.

The agency also said it affirmed the A- long-term corporate credit rating on Swire Pacific and its guaranteed senior unsecured notes.

In line with the outlook revision, S&P also said it lowered the company’s long-term Greater China regional scale rating to cnAA- from cnAA.

The agency also said it affirmed the rating on the group's subordinated perpetual notes at BBB and cnA.

The outlook revision reflects a view that the company's financial leverage is likely to remain elevated over the next 12 to 18 months, S&P said.

The agency said it believes weak economic conditions in Greater China and volatile oil prices will continue to affect the group's earnings and profitability.

Although S&P said it considers earnings cyclicality into the rating, the visibility of earnings rebound is limited due to the sluggish market conditions.

Swire Pacific's capital expenditure is likely to remain elevated due to development of its investment properties and high ongoing capital expenditure in other divisions such as aviation and beverages, the agency said.

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