S&P has affirmed CIMIC Group's investment grade credit rating but flagged the company's rising use of factoring.

The credit ratings agency held CIMIC at "BBB/Stable/A-2" but said trade receivables securitisation—raising cash by selling what you are owed by other parties—had reduced the strength of its financial position.

"Our assessment of the company's financial risk reflects its healthy cash balances and moderately leveraged balance sheet," S&P said.

"That said, CIMIC's financial buffer has eroded significantly over the past three years partly due to a material increase in factoring obligations (factoring balance of about $1.87 billion as of June 2020).

"Factoring is the most relevant addition we make to the group's reported debt. In our base-case scenario for the ratings, we assume limited working capital growth and unchanged use of factoring in fiscal 2021."