S&P lowers Eurasian Resources

S&P said it lowered long-term corporate credit rating on Eurasian Resources Group (ERG) Sarl to CCC+ from B- and its short-term corporate credit rating to C from B.

The outlook is stable.

S&P also said it removed the ratings from CreditWatch, where they were placed with negative implications in February.

The company’s liquidity is weak and its capital structure is considered unsustainable at current depressed commodity prices, the agency said.

The company also is yet to receive waivers after breaching its financial covenants earlier this year, S&P said, and it is likely to breach an additional set of financial covenants later this year.

While the agency said it does not expect the debt level to accelerate given the company's government links and relationships, it will remain dependent on bank support.

The current rating also continues to factor ongoing support from the Kazakh government, the company’s 40% owner, S&P added.

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