Lion Nathan rating upgraded to BBB-/A-3, outlook stable: S&P

HONG KONG (AFX-ASIA) - Standard and Poor's said it has upgraded the rating of Lion Nathan Ltd and its guaranteed debt issues and programmes to "BBB-/A-3" from "BB+/B-" with a stable outlook.	    S&P said the rating "reflects the improved operating performance of its Australian brewing operation, the strong growth prospects of its 51 pct-owned wine company Montana Group (NZ) Ltd and the company's commitment to scaling down its exposure to the Chinese beer market where the company has sustained losses for six years".	     S&P noted that Lion Nathan's Australian brewing operation accounts for 70-75 pct of earnings.	     "The consolidation of its Australian market share in the low 40 pct area, and the sustained improvement in its product mix, pricing and operation efficiency should underpin the division's steady earnings growth and modestly improve its return in the next few years," S&P said.	    "In New Zealand, Lion Nathan's returns are expected to remain satisfactory in the next few years as the industry adjusts to lower sales volumes," S&P said.	    "Strong cashflow from its Australian brewing operation and a cautious growth strategy primarily focused on wine should underpin Lion Nathan's stable credit quality in the medium term," S&P said.	    "Importantly, these factors are essential given the company's moderately aggressive financial policy and modest cashflow protection measures," S&P added. 

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