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

(The following statement was released by the rating agency)

Oct 11 - Overview

-- We expect China-based conglomerate Baosteel to demonstrate lackluster operating 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 on Baosteel to 'A-' from 'A'. At the same time, we are lowering our long-term Greater China regional scale ratings on Baosteel and its debt to 'cnAA' from 'cnAA+'.

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

Rating Action

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