Fitch cuts PCCW-HKT

Fitch Ratings said it has downgraded PCCW-HKT Telephone Ltd.'s long-term foreign currency issuer default rating and the rating of its senior unsecured debt to BBB- from BBB+, following the recent shareholder approval of PCCW Ltd.'s privatization proposal.

The ratings remain on rating watch negative, where they were placed on Nov. 18, following the announcement of the joint privatization plan by the company's major shareholders, Pacific Century Regional Developments Ltd. and China Netcom Communications Group Corp., the agency added.

Fitch said that the downgrade reflects the approval of a transaction that indicates the two major shareholders' willingness to increase the financial leverage of the PCCW group, although Fitch understands that the privatization plan is still pending the approval of the High Court of Hong Kong.

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