S&P's Sun Hung Kai ratings unaffected

Standard & Poor's said that while it views a recent share placement of about HK$8 billion by Hong Kong-based Sun Hung Kai Properties Ltd. (A/stable) as positive, it does not expect the placement to affect the corporate credit rating. The share placement will lower the company's leverage and help to fund its expansion plans.

The agency said Sun Hung Kai has stepped up its business-expansion program, especially in China, which S&P views as a higher-risk market. As a result, the company's debt-to-capital ratio rose to about 18% at Dec. 31 from 13% at June 30, 2005. The company's recent strategy to unload some of its existing inventory of unsold residential units, and an upcoming plan to list a real estate investment trust and to sell more new units, will also help to fund the expansion. Accordingly, the agency expects the company's financial flexibility to improve over the near term.

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