S&P: PCCW-HKT Telephone developing

Standard & Poor's said it placed its BBB corporate credit rating on PCCW-HKT Telephone Ltd., a wholly owned subsidiary of PCCW Ltd., on CreditWatch with developing implications.

The CreditWatch placement follows PCCW's recent announcement that it is in advanced discussions with China Network Communications Group Corp. (Netcom Group), mainland China's second-largest fixed line operator, regarding the sale of a significant stake in PCCW-HKT Telephone to Netcom Group. No definitive agreement or letter of intent has yet been signed.

In view of the CreditWatch placement, S&P said it will review any proposed transaction and its impact on the company's credit quality. If an acquisition is announced, the credit profile of Netcom Group and the terms and conditions of the transaction will be key determinants in the rating on PCCW-HKT Telephone. If a transaction does not materialize, the rating on PCCW-HKT Telephone will be affirmed.

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