Moody's rates Capco A1

Moody's Investors Service said it assigned a first-time A1 long-term issuer rating and a P-1 short-term issuer rating to Castle Peak Power Co. Ltd. (Capco).

The agency also said it assigned a provisional A1 long-term senior unsecured rating and provisional P-1 short-term rating to the proposed $2 billion medium-term note program of Castle Peak Power Finance Co. Ltd., a wholly owned subsidiary of Capco.

The outlook is stable.

The notes issued from the program will be unconditionally and irrevocably guaranteed by Capco, the agency explained.

The proceeds will be used for refinancing existing debt and capital expenditures, Moody's said.

The ratings reflect Capco's predictable cash flow and low-risk business profile, underpinned by its robust power purchase agreement and the stable regulatory environment in Hong Kong, the agency said.

The ratings also consider Capco's high operational and financial linkages to CLP Power and its strong financial headroom against a likely increase in leverage over the next three to four years, Moody's said.

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