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TEXT-S&P cuts Baosteel Group to 'A-' & 'cnAA',otlk stable

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(The following statement was released by the rating agency)

Oct 11 - Overview

-- We expect China-based conglomerate Baosteel to demonstrate lacklusteroperating performances and to make increasing investments in 2012-2013,leading to weaker credit protection measures.

-- We are lowering our long-term corporate credit and issue ratings onBaosteel to 'A-' from 'A'. At the same time, we are lowering our long-termGreater China regional scale ratings on Baosteel and its debt to 'cnAA' from'cnAA+'.

-- The stable outlook reflects our expectation that Baosteel can maintainits financial strength over the next 12-24 months despite a downturn in thesteel industry, based on its good market position and focus on high-endproducts.

Rating Action

On Oct. 11, 2012, Standard & Poor's Ratings Services lowered its long-termcorporate credit rating on China-based steel-focused conglomerate BaosteelGroup Corp. to 'A-' from 'A'. The outlook is stable. At the same time, welowered the issue ratings on its outstanding debt to 'A-' from 'A'. We alsolowered our long-term Greater China regional scale ratings on the company andits debt to 'cnAA' from 'cnAA+'.

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