S&P downgrades Quintis

S&P said it lowered the corporate credit rating on Quintis Ltd. to B from B+.

The agency also said it placed the ratings on CreditWatch with negative implications.

S&P also said it lowered the ratings on the company's senior secured notes to B from B+.

The recovery rating is unchanged at 4.

S&P said it lowered the rating because it believes the risk of investor cash flows being lower than what the company expects has heightened because of protracted delays in sandalwood sales into China.

The company's plantation investor cash flows predominantly occur during the last two weeks of June, the agency explained.

Therefore, a lack of certainty regarding sandalwood product sales into China could increasingly undermine investor confidence and result in reduced investor cash flows for the year ending June 30, 2017, S&P said.

Quintis has made significant progress in confirming a new buyer for Indian sandalwood products into China, the agency said. That's why there is a reasonable possibility that the contract to purchase the wood will be confirmed before the end of May 2017, S&P said.

But risks remain regarding delays in confirmation and the potential impact this could have on investor confidence, the agency said.

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