S&P Global Ratings maintained Far East Horizon's (HKG:3360) BBB- long- and A-3 short-term issuer credit ratings, as the rating agency expects the company to continue improving its capitalization in the next two years.

A slower-than-expected growth in financial lease receivables will support the company's sustained capital enhancement, the rating agency said in a Wednesday release.

The Hong Kong-based financial leasing company saw it risk-adjusted capital ratio rise to 8.2% by June from 7.7% a year ago.

S&P also expects the company to keep its ample asset quality and more stable earnings.

However, the company faces risks from Horizon Construction Development (HCD), its equipment leasing operations, albeit at a manageable level, the rating agency said.

HCD is reliant on short-term debt, causing a high debt leverage, and has a small market share.

The outlook is stable, mirroring S&P's view that Far East Horizon will retain its credit profile in the next two years.

A significant increase in HCD's size or weaker credit risk metrics could prompt negative rating actions, S&P said.

A rating upgrade, although considered unlikely in the next two years, will hinge on a substantial rise in the company's risk-adjusted capital ratio.

Price (HKD): $5.54, Change: $-0.020, Percent Change: -0.36%