Moody's affirms PCCW-KHT

Moody's Investors Service said it affirmed PCCW-HKT Telephone Ltd.'s senior unsecured Baa2 rating.

The outlook is stable, balancing the challenges associated with the ongoing deterioration in HKT's fixed-line revenue base against improving broadband and data revenue and property investment cash flows at the PCCW group level, Moody' said.

The rating reflects the company's strong market position and efficient operations, resulting in healthy cash flows; leadership in next-generation product development that will assist in retention of customers and bolster growth of new revenue streams; and sound group liquidity, including a well-structured and long-term debt maturity profile, the agency said.

Moody's said the rating also considers risks associated with the company's robust operating environment, with revenue subjected to significant competition; its leverage; and its ability to grow earnings while substituting lower-margin new-gen products for previous high-margin, fixed-line voice products.

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