Shandong Helon Co.,Ltd. (000677) lost its investment-grade credit rating from China Lianhe Credit Rating Co.,Ltd. one of the nation’s largest credit rating companies.

Lianhe cut its assessment for the maker of fiber and yarns to BB+, its highest non-investment ranking, by four steps from A-, the rating company said in a statement yesterday. It maintained its negative outlook on the company.

The rating company cited continued deterioration in Shandong Helon’s financial situation, and said the chance it will default is rising.

Beijing-based Lianhe also cut its rating on the company’s 400 million-yuan, 5.8 percent bond to non-investment grade B from A-2, according to the statement. The yield on the company’s bond due in 2012 has risen 12.5 basis points to 9.215 percent this month, according to Chinabond, the nation’s clearinghouse.