S&P: CheungKong Infrastructure notes BBB

Standard & Poor’s said it assigned a BBB rating and cnA long-term Greater China regional scale rating to the proposed guaranteed perpetual capital securities to be issued by OVPH Ltd. and guaranteed by CheungKong Infrastructure Holdings Ltd.

The agency said it considers the securities to have intermediate equity content and has treated 50% of the principal as equity and 50% of the distributions as dividends in its financial ratio calculations.

The securities are rated two notches less than the A- long-term corporate credit rating on CheungKong Infrastructure, reflecting the subordinated status of the securities and optional deferability feature.

The proceeds will be used for general corporate purposes, including refinancing its outstanding hybrid securities issued in September 2010, S&P said.

Because of the forthcoming replacement and redemption, the agency said it will revise the equity content of the 2010 issue to minimal from intermediate upon issuance of the new instrument, the agency said.

The rating on CheungKong Infrastructure is unaffected by the proposed issuance of the guaranteed perpetual capital securities and S&P said it believes the issuance will have a minimal impact on the company’s consolidated balance-sheet leverage ratios.

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