S&P puts CLP on negative watch

Standard & Poor's said it placed its A- long-term and A-2 short-term corporate credit ratings on CLP Holdings Ltd. on CreditWatch with negative implications.

The agency also placed its A long-term and A-1 short-term corporate credit ratings on CLP Power Hong Kong Ltd. on CreditWatch with negative implications.

At the same time, S&P placed the following Greater China regional scale ratings on CreditWatch with negative implications: the cnAA long-term and cnA-1 short-term ratings on CLP Holdings and the cnAA+ long-term and cnA-1 short-term ratings on CLP Power. It also placed the issue ratings on all the outstanding notes that CLP Power has guaranteed on CreditWatch with negative implications.

"We placed the ratings on CreditWatch because we believe the leverage of CLP Holdings could increase substantially if it mainly uses debt to fund its proposed significant acquisition," S&P credit analyst Gloria Lu said in a news release. The cash flow contribution from the acquisition has already been factored in the current rating approach to both CLP Holdings and CLP Power.

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