S&P affirms Honk Kong Telecom

Standard & Poor's said it affirmed its BBB long-term corporate credit rating on Hong Kong Telecommunications Ltd. The outlook is stable.

The agency said it also affirmed the BBB issue ratings on the company's outstanding senior unsecured notes, which HKT Group Holdings Ltd. guarantees. At the same time, the agency said it raised the Greater China credit scale ratings on Hong Kong Telecommunications to cnA from cnA-.

All the ratings were removed from CreditWatch, where they were placed with negative implications on March 25, 2011, S&P said.

"We affirmed the ratings to reflect our expectation that HKT's parent, PCCW Ltd., will substantially deleverage its balance sheet after the trust listing of its telecommunications assets," said S&P credit analyst Jun Hong Park in a news release. "Upon completion of the planned debt repayment, we expect PCCW's ratio of adjusted total debt to EBITDA to improve to about 3.5x from 4.6x in 2010."

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