Fitch affirms Swire Pacific

Fitch Ratings said it affirmed Swire Pacific Ltd.’s long-term foreign-currency issuer default rating at A- with a stable outlook.

The agency also affirmed the foreign-currency senior unsecured rating at A-.

Swire Pacific is a property-centric conglomerate. Its 82%-owned listed Swire Properties Ltd. (A/stable) is the biggest contributor to underlying group profit.

“Swire Properties owns a strong financial and business profile, providing stable and predictable rental income to Swire Pacific, which results in sufficient investment-property EBITDA/cash interest coverage,” Fitch said in a news release.

“Swire Pacific is rated one notch below Swire Properties, due to its structural subordination to external parties in accessing the stable operating cash flows of Swire Properties. All segments of Swire Pacific generated positive operating cash flow (before impairment charges) in 2017 even when its aviation and marine businesses were loss-making.

“Swire Pacific’s net debt/recurring operating EBITDA and FFO/interest coverage also justify its A- rating.”

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