TEXT-S&P cuts China Fishery to 'B+'; outlook stable

(The following statement was released by the rating agency)

Sept 28 -

Overview

-- China Fishery's business risk profile is likely to weaken due to

increasing regulatory risks from its operations in Russia.

-- The weak financial risk profiles of China Fishery's parent companies

also constrain the rating.

-- We are lowering our long-term corporate credit rating on the

China-based fishery company and the issue rating on its notes to 'B+' from

'BB-'.

-- The stable outlook reflects our expectation that China Fishery's

performance will remain largely stable over the next six to 12 months despite

the difficult operating conditions.

Rating Action

On Sept. 28, 2012, Standard & Poor's Ratings Services lowered its long-term

corporate credit rating on China Fishery Group Ltd. to 'B+' from 'BB-'. The

outlook is stable. At the same time, we lowered our issue rating on the

company's US$300 million senior unsecured notes due 2019 to 'B+' from 'BB-'.

We affirmed the 'cnBB' long-term Greater China regional scale ratings on China

Fishery and its outstanding senior unsecured notes.

Rationale

We downgraded China Fishery to reflect our view that regulatory risk for the

company has increased and could undermine the company's already "weak"

business risk profile, as our criteria define the term.

Russia's Federal Antimonopoly Service (FAS) has inquired about the operations

of China Fishery and its parent group, Pacific Andes, in Russian waters.

Despite China Fishery's increased diversity, it continues to rely heavily on

its Russian operations, which generated nearly two-thirds of the company's

revenue, EBITDA, and operating cash flow for the first nine months of the

fiscal year ending Sept. 30, 2012. China Fishery and its parent group

confirmed that they believe their fish supply agreements are in full

compliance with all relevant laws and regulations of the Russian Federation.

However, in our view, the regulatory risk remains high in Russia.

Source: http://news.yahoo.com/text-p-cuts-china-fishery-b-outlook-stable-081656192--sector.html

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