Moody's: Sun Hung Kai Properties' view negative

Moody's Investors Service said it revised to negative from stable the outlook for the A1 senior unsecured rating of Sun Hung Kai Properties Ltd.

The rating action follows the recent arrest of the company's joint chairmen and managing directors, Thomas Kwok Ping-kwong and Raymond Kwok Ping-luen, by Hong Kong's Independent Commission Against Corruption.

"The outlook revision reflects Moody's concerns over the potential negative implications for the company's franchise, decision-making process, and its access to funding in the near term, which may lead to higher costs of funding," said Kaven Tsang, a Moody's assistant vice president and analyst, in a news release.

On the other hand, Moody's said it draws comfort from Sun Hung Kai Properties' established business operations, with cash of HK$9.2 billion at the end of December 2011 and net rental income of about HK$10 billion-HK$11 billion per annum.

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