Moody's upgrades WTT notes, stable outlook

Moody's Investors Service said it upgraded the rating on the senior unsecured notes that were issued by WTT Investment Ltd. to Ba2 from Ba3 and have been assumed by HKBN Ltd.'s Metropolitan Light Co. Ltd.

The outlook also was revised to stable from positive.

Moody's said it withdrew WTT HK Ltd.'s Ba3 corporate family rating with a positive outlook.

The upgrades reflect the full assumption of bond obligations by HKBN and the extension of unconditional guarantees by HKBN's key subsidiaries to the WTT notes, the agency said.

Following the completion of their merger, WTT and HKBN announced in May that Metropolitan Light assumed all the obligations under the WTT notes, Moody's said.

In addition, HKBN Group and key operating subsidiary, Hong Kong Broadband Network Ltd., each unconditionally guarantees the notes, the agency said.

These developments mean that the expected loss prospect on the WTT notes is now on par with existing HKBN debt, which is driven by HKBN's credit quality, Moody's said.

The ratings reflect HKBN's solid business profile as the second largest telecommunications service provider in Hong Kong in the fixed-line segment by revenue, along with geographic concentration in Hong Kong and modest scale when compared to global telecommunications peers, the agency said.

The merger will strengthen the companies' combined competitive position in the enterprise fixed-line market, Moody's added.

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