S&P lowers China Automation view to negative

Standard & Poor’s said it revised the outlook on China Automation Group Ltd. to negative from stable.

The agency also said it affirmed the company’s B+ long-term corporate credit rating, along with the B+ rating on its $200 million 7¾% senior unsecured notes due April 20, 2016 and $30 million in 8¾% senior unsecured notes due 2018 issued by Tri-Control Automation Co. Ltd.

China Automation Group guarantees the $30 million notes, S&P said.

In line with the outlook revision, the agency also said it lowered the long-term Greater China regional scale on China Automation and its notes to cnBB- from cnBB.

The outlook revision reflects an expectation that China Automation’s high leverage may further deteriorate over the next 12 months, S&P said.

Although the manufacturer of industrial safety and control systems has a clear plan to reduce its debt, the agency said it believes the industry downturn and intensifying competition landscape will make de-leveraging more difficult, the agency said.

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