Hong Kong telecoms conglomerate PCCW plans to issue US dollar-denominated notes to refinance US$500m of debt.
The proposed offering, which will be guaranteed by affiliated telco Hong Kong Telecommunications (HKT) and its parent company HKT Group, has…
Hong Kong telecoms conglomerate PCCW plans to issue US dollar-denominated notes to refinance US$500m of debt.
The proposed offering, which will be guaranteed by affiliated telco Hong Kong Telecommunications (HKT) and its parent company HKT Group, has been given a Baa2 senior unsecured rating by Moody’s, with a stable outlook.
The ratings agency said the group would likely use proceeds from the bond to refinance its US$500m of 6% notes due July 2013, enabling the company to term out its debt maturity profile and lower its interest costs.
Once the notes due 2013 are repaid, HKT’s next major debt maturity will be in July 2015, when its US$500m of 5.25% notes are due, according to Moody’s.
HKT Limited is currently 63% owned by PCCW. Its subsidiary HKT Group consolidates all of PCCW’s telecoms assets, including fixed-line, broadband and mobile which, together with PCCW’s IPTV services, makes it the only operator in Hong Kong to offer quadruple play services.
“The Baa2 rating reflects the stable profile of HKT Limited’s core fixed-line telecommunications business, supported by its dominant market position in Hong Kong, as well as the company’s strong liquidity position,” said Moody’s analyst Yoshio Takahashi.
“While we expect HKT Limited’s leverage to remain high for the Baa2 rating, with adjusted debt/EBITDA of over 3.0x, this can be offset by the underlying stability of its fixed-line businesses, as well as its competitive advantage as the only quad-play operator in Hong Kong,” he added.
