Fitch rates Wharf notes A-(exp)

Fitch Ratings said it assigned an expected rating of A-(exp) to the proposed dollar-denominated notes to be issued by Wharf Finance Ltd. and guaranteed by Wharf (Holdings) Ltd. (A-/stable).

The agency said Wharf's issuer default rating reflects the stable rental income generation from its quality property portfolio in Hong Kong, its strong liquidity profile and the moderate industrial and geographical diversification provided by its exposure to the container terminal and media businesses.

Credit constraints include exposure to the competitive media and telecom industry and Wharf's expansion into mainland China's property market, especially property development projects that are more volatile than investment properties and subject to the timing of project launches, Fitch said.

At the end of June 2011, Wharf's ratio of total adjusted net debt to operating EBITDA was around 3.8 times.

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