S&P affirms CLP Power Hong Kong

Standard & Poor's said it affirmed its A+ corporate credit rating on CLP Power Hong Kong Ltd. and removed it from CreditWatch negative.

The outlook is stable.

The rating action follows CLP Holdings' recent acquisition of Australia from SPI Australia Group in a HK$13 billion transaction.

The action on CLP Power reflects the company's standalone financial and operating strengths, S&P said.

Of great importance to CLP Power's credit profile is the company's near monopoly status as it serves about two-thirds of Hong Kong, and the Scheme of Control Agreement with the Hong Kong government, which allows CLP Power to earn a return of up to 15% on the company's average net fixed assets, the agency said.

Although the SCA is likely to be renegotiated over the next few years, the company's market position and financial performance are expected to remain very strong.

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