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S&P withdraws Cheung Kong's rating
Source: Bloomberg News |
December 30, 2011, Friday
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CHEUNG Kong (Holdings) Ltd, controlled by Hong Kong billionaire Li Ka-shing, had its long-term corporate credit rating withdrawn by Standard & Poor? which said it hasn't been able to "accurately assess" the credit quality of the developer.
The ratings company withdrew the A- "unsolicited" rating, which was based on publicly available information because it had "no access to the company management for the past three years," S&P said in a statement on Wednesday.
"We can't evaluate Cheung Kong's liquidity accurately due to recent revisions to our liquidity criteria as the company has made material acquisitions in the past 12 months and continues to be active on the acquisition trail," analysts Christopher Lee and Bei Fu wrote in the statement.
Hong Kong's second-biggest builder by market value has spent more than HK$22 billion (US$2.83 billion) buying land in the city this year, the company's interim report shows. It's seeking acquisitions in China as the country's liquidity crunch make it a "golden time" for Cheung Kong, Executive Director Justin Chiu said in November.
"Of course if you can't get access to management for three years, you won't be getting a very clear picture of the company," said Lee Wee Liat, Hong Kong-based property analyst at Samsung Securities Ltd. "They have done a bit of acquisitions lately but that didn't materially weaken their balance sheet. They still have one of the strongest balance sheets among Hong Kong developers."
Cheung Kong had a debt-to-common-equity ratio of 11 percent at the end of June, according to data compiled by Bloomberg News. That compares with 20 percent for Sun Hung Kai Properties Ltd, the biggest developer in Hong Kong, and 15 percent for Hang Lung Properties Ltd, the third largest.
Cheung Kong's S$730 million (US$561 million) of 5.125 perpetual notes, sold to investors at par in September, were little changed yesterday, yielding 5.098 percent versus 5.021 percent on September 23, Nomura Holdings Inc prices show. Its S$180 million of 2.585 percent, five-year bonds due July 2016 yielded 3.122 percent yesterday versus 3.134 percent as of Wednesday's close, DBS Group Holdings Ltd prices on Bloomberg News show.
Cheung Kong discontinued S&P's ratings services in 2009.
The ratings company withdrew the A- "unsolicited" rating, which was based on publicly available information because it had "no access to the company management for the past three years," S&P said in a statement on Wednesday.
"We can't evaluate Cheung Kong's liquidity accurately due to recent revisions to our liquidity criteria as the company has made material acquisitions in the past 12 months and continues to be active on the acquisition trail," analysts Christopher Lee and Bei Fu wrote in the statement.
Hong Kong's second-biggest builder by market value has spent more than HK$22 billion (US$2.83 billion) buying land in the city this year, the company's interim report shows. It's seeking acquisitions in China as the country's liquidity crunch make it a "golden time" for Cheung Kong, Executive Director Justin Chiu said in November.
"Of course if you can't get access to management for three years, you won't be getting a very clear picture of the company," said Lee Wee Liat, Hong Kong-based property analyst at Samsung Securities Ltd. "They have done a bit of acquisitions lately but that didn't materially weaken their balance sheet. They still have one of the strongest balance sheets among Hong Kong developers."
Cheung Kong had a debt-to-common-equity ratio of 11 percent at the end of June, according to data compiled by Bloomberg News. That compares with 20 percent for Sun Hung Kai Properties Ltd, the biggest developer in Hong Kong, and 15 percent for Hang Lung Properties Ltd, the third largest.
Cheung Kong's S$730 million (US$561 million) of 5.125 perpetual notes, sold to investors at par in September, were little changed yesterday, yielding 5.098 percent versus 5.021 percent on September 23, Nomura Holdings Inc prices show. Its S$180 million of 2.585 percent, five-year bonds due July 2016 yielded 3.122 percent yesterday versus 3.134 percent as of Wednesday's close, DBS Group Holdings Ltd prices on Bloomberg News show.
Cheung Kong discontinued S&P's ratings services in 2009.
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