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Li & Fung has been downgraded by a notch to BB from BB+ by S&P. The company’s senior unsecured notes and perpetual junior hybrid notes were also lowered by a notch to BB and B respectively. The rating action follows the weak operating performance by Li & Fung in FY2023, which was sort of unexpected as the company had built some growth momentum in revenues and profits in previous years. S&P expects a slower operating recovery for Li & Fung as many external factors have affected the company’s competitive edge. However, it believes the company has sufficient financial strength to repay its debts due in 2025.
Its 5% 2025s traded stable at 97.6 cents on the dollar, yielding 6.9%.