Chinese Estates rating lowered to B+/off CreditWatch: S&P

HONG KONG (AFX-ASIA) - Standard & Poor's has lowered its corporate credit rating for Chinese Estate Holdings Ltd to 'B+' from 'BB-'.	    It said in a statement that the downgrade reflects the company's poor operating performance and debt-financed property acquisitions, which have resulted in weak cash flow protection measures and diminished financial flexibility.	    Chinese Estates' operating income has been driven down by a slower-than-expected recovery in the property development business, and continued negative rental reversions, it said.	    The company's property development business made a loss in 2000 as it sold off high-cost inventory. 	    The rating agency said operating results should improve by 2002, as Chinese Estates gradually completes new projects, although the improvement is not expected to be sufficient to justify the former 'BB' credit rating.	    S&P said it has removed Chinese Estates from CreditWatch, where it was placed on Feb 14.	    It said, however, the long-term rating on Chinese Estate could be lowered if the company's operating performance and liquidity situation do not improve in the coming years.	    S&P will also monitor future asset transfers between the major family shareholder and Chinese Estates, as well as any new acquisitions, which would further weaken the company's financial profile. 

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