We expect Hongqiao's cash flow and leverage to deteriorate over the next 12-18 months due to higher-than-expected capital spending, weakening its financial risk profile to "aggressive" from "significant." We are lowering the long-term corporate credit rating on the China-based aluminum producer and the issue rating on its senior unsecured notes to 'BB-' from 'BB'. We are also lowering our long-term Greater China regional scale rating on Hongqiao and on its notes to 'cnBB+' from 'cnBBB-'. The stable outlook on Hongqiao for the next 12 months reflects our view that increasing aluminum production volume and lower production costs may lead to higher operating efficiency, which may mitigate the negative impact from declining aluminum prices. On Sept. 1, 2015, Standard&Poor's
