S&P lowers Hong Kong and China Gas

S&P said it lowered the long-term issuer credit rating on the Hong Kong and China Gas Co. Ltd.'s to A from A+.

The agency also said it lowered the ratings on all outstanding notes guaranteed by Hong Kong and China Gas by one notch.

HKCG (Finance) Ltd.'s senior unsecured notes were lowered to A from A+, along with Towngas (Finance) Ltd.'s subordinated perpetual securities to BBB+ from A-.

The company's increasing exposure to mainland China utilities and commitments to new energy business entails greater volatility in its business risk and financial performance.

The outlook reflects an expectation that Hong Kong and China's FFO-to-debt ratio will remain at higher than 30%, S&P said.

The company will not significantly increase its exposure to mainland utilities and new energy business in the next 24 months, the agency said.

S&P said the downgrades reflect an expectation that the company's leverage will only marginal improve and stay lower than 40% over 2019 to 2020.

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