February 23, 2009 / 10:01 PM / 10 years ago

S&P cuts Janus Capital rating to junk

* S&P cuts rating one notch to junk

* Janus stock closes down 12 percent

Feb 23 (Reuters) - Janus Capital Group Inc’s JNS.N credit rating was cut by one notch to junk status by Standard & Poor’s Ratings Services to reflect the asset manager’s weakened debt-servicing capacity, sending its shares down as much as 18 percent.

The rating agency lowered its ratings, including the counterparty rating on the money manager, to “BB+” from “BBB-“, but said its outlook on the company was stable.

Janus’ debt-servicing capacity was unlikely to improve in the near term as assets under management and cash-flow generation have fallen considerably in the recent months, S&P said.

“Janus has been harder hit than most other rated asset managers during the global plunge in stock prices, because it is primarily an equity shop,” S&P said in a statement.

Asset managers like Janus generate the bulk of their revenue from fee income based on a percentage of assets under management. But those assets are shrinking as stock prices slump in the wake of the credit crisis.

Assets under management at Janus fell to $123.5 billion by the end of December 2008 from $206.7 billion a year earlier and $160.5 billion at the end of September 2008.

The rating agency said Denver-based Janus has $275 million of notes maturing in September 2011 and another $300 million in June 2012.

“We believe Janus’ ability to meet these obligations has weakened, based on our assessment of the company’s financial resources and our earnings projections,” S&P said.

Janus shares, which have shed more than 40 percent since the start of the year, closed down 12.1 percent at $3.99 Monday on the New York Stock Exchange. (Reporting by Dinesh Nair, Editing by Himani Sarkar)

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