S&P lowers Red Star view to negative

S&P said it revised the outlook on Red Star Macalline Group Corp. Ltd. to negative from stable.

The agency also said it affirmed the BBB long-term corporate credit rating and lowered the long-term Greater China regional scale rating on the company to cnA- from cnA.

S&P also said it affirmed the BBB- long-term issue rating and lowered the Greater China regional scale issue rating to cnBBB+ from cnA- on the proposed issue of dollar-denominated senior unsecured notes issued by Hong Kong Red Star Macalline Universal Home Furnishings Ltd., a subsidiary of Red Star.

The parent unconditionally and irrevocably guarantees the notes, S&P noted.

The outlook revision reflects a view of a material likelihood that Red Star's ratio of debt-to-EBITDA will remain higher than the downside trigger of 7.5x over the next two years, the agency explained.

S&P said it expects the group to keep its debt high to support growth opportunities in its real estate development business.

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