S&P rates Hong Kong and China Gas bond A+

Standard & Poor's said it assigned the A+ long-term corporate credit rating to Hong Kong and China Gas Co. Ltd. and an A+ rating to its proposed senior unsecured fixed-rate notes.

The outlook is stable.

Proceeds will be used for refinancing, new capital projects and general corporate purposes.

The rating reflects the company's de facto monopoly in its home market of Hong Kong, its predictable profitability and cash flow as a result of the full fuel cost pass-through scheme in Hong Kong, and its strong financial profile, S&P said.

These strengths are partly offset by the higher business risks from Towngas' expansion into unregulated operations in China, uncertain regulatory risks in the mainland for its piped gas business and its maturing home market, the agency said.

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