Moody's: HKT still on review

Moody's Investors Service noted the continued progress made by PCCW Ltd. regarding the listing of HKT Ltd. and the proposed $ billion pay down of debt at Hong Kong Telecommunications Ltd. and all entities irrevocably and unconditionally guaranteed by it.

The group has Baa2 ratings and the ratings remain under review for possible downgrade pending the successful and timely completion of the trust listing, Moody's said.

PCCW is the 100% shareholder in HKT Group Holdings Ltd., which wholly owns Hong Kong Telecommunications. HKT and HKT Group are the unconditional guarantors for bonds outstanding totaling $2.5 billion.

Should plans for listing and a $1 billion debt reduction, along with the $1 billion 7.75% bonds due Nov. 15, 2011 be repaid as scheduled from cash and drawings under committed facilities, there will be a total net reduction in debt of about $1.5 billion, which should reduce adjusted gross debt-to-EBITDA to about 3.5x for the full year ended December 2011, Moody's said.

Given this dynamic, it is likely that Moody's would conclude the rating review and confirm the ratings at Baa2 with a stable outlook, the agency said.

However, should the plans for the business trust structure be aborted or timing be delayed beyond the anticipated closing date of the fourth quarter of 2011, then Moody's will likely downgrade the Baa2 ratings to Baa3, Moody's said.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.