Moody's may cut HKT Group

Moody's Investors Service said it continued its review for possible downgrade on the Baa2 ratings of Hong Kong Telecommunications (HKT) Ltd. and all entities irrevocably and unconditionally guaranteed by it.

PCCW Ltd. is the 100% shareholder in HKT Group Holdings Ltd., which in turn wholly owns Hong Kong Telecommunications. Hong Kong Telecommunications and HKT Group are the unconditional guarantors for bonds outstanding, totaling $2.5 billion.

While PCCW is progressing in its business trust proposal, the review for possible downgrade continues given that PCCW is still to finalize key terms and conditions pertaining to the proposed business trust structure for its telecommunications-related assets under HKT Group, said Laura Acres, a Moody's analyst.

PCCW has stated that its plans to divest a minority stake in the business trust and allocate part of the proceeds towards debt reduction at Hong Kong Telecommunications, the agency said.

While this is credit positive, there are still a number of uncertainties that need to be assessed, the agency said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.