S&P rates CLP Power notes A

Standard & Poor's said it assigned an A rating and cnAA+ Greater China credit scale rating to the proposed issue of dollar-denominated senior unsecured notes by CLP Power Hong Kong Financing Ltd.

CLP Power Hong Kong, wholly owned by CLP Holdings Ltd., will unconditionally and irrevocably guarantee the issue.

S&P said it views this drawdown from the $3.5 billion senior unsecured medium-term note program as part of the company's annual funding exercise.

The proceeds will be used to refinance debt, fund capital expenditure and meet the company's working capital requirement, the agency said.

The favorable regulatory environment in which the company operates supports the ratings, S&P said.

CLP Power has a monopoly in its service area in Hong Kong, a modest financial risk profile and strong financial flexibility, the agency said.

But the company's need to secure long-term replacement natural gas supply for its affiliated generation facilities is an operational challenge, S&P said.

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