S&P Maalot cuts Oil Refineries outlook to negative

JERUSALEM, July 7 (Reuters) - Standard & Poor's Maalot said on Tuesday it had lowered its outlook for bonds of Israel's Oil Refineries (ORL.TA) to "negative", citing expectations for continued erosion in the refining industry.

The Israeli S&P unit maintained a rating of "A" for Oil Refineries' bonds, which had been on the agency's CreditWatch "negative" list since April.

"As of March 2009, we have been witnessing significant deterioration in refining revenues, which we believe will place pressure on the company's cash flow for the next 12 months at least," analyst Karl Nietvelt wrote in a report to clients.

He cited an aggressive $1.1 billion investment plan that Oil Refineries plans to implement through debt that will increase its leverage.

Oil refineries, Israel's biggest refinery, is a subsidiary of holding company Israel Corp (ILCO.TA). (Reporting by Joseph Nasr; Editing by Jon Loades-Carter)