S&P's Swire Pacific ratings unaffected

Standard & Poor's said the long-term corporate credit rating on Swire Pacific Ltd. (A-/stable) was not affected by the acquisition of CITIC Pacific Ltd.'s (BBB-/stable/A-3) entire 50% interest in Hong Kong's Festival Walk shopping center for a cash consideration of HK$6.2 billion.

Although the acquisition will significantly increase debt levels at Swire Pacific, the company's overall financial metrics will remain commensurate with the rating, S&P said. Pro forma debt to capitalization levels are expected to remain low, at about 15%, up from 10% at the end of fiscal 2004, with the ratio of funds from operations to total debt falling to about 35%, compared with 60% at the end of fiscal 2004. The ratio of debt to EBITDA is expected to rise to about 2.5x, compared with 1.7x at the end of fiscal 2004.

The agency described Festival Walk as a good asset and said its value was estimated at HK$12.34 billion as of Dec. 31.

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