[ET Net News Agency, 2 November 2017] S&P Global Ratings said today that Cheung Kong
Asset Holdings Ltd.'s (CKAH: A/Stable/--)(01113) proposed disposal of its substantial
asset, The Center, will increase its financial buffer.
However, the sale could be an additional factor affecting its assessment of its
competitive advantage in property business in Hong Kong. The rating and outlook on CKAH
are not affected because S&P expects the company's loss of rental income from this
disposal to be relatively small, and well offset by additional cash inflow and hence
improved liquidity.
The agency believes this sale is credit positive because it views this disposal as asset
recycling at the top of the property cycle. CKAH has a good track record of re-investing
in stable, yield accretive assets.
That said, S&P sees rising re-investment risk given increasing asset prices. It views
CKAH's co-investment with the group, CK Hutchison Holdings Ltd. (CKH:
A-/Positive/--)(00001), and its sister company, CK Infrastructure Holdings Ltd. (CKI:
A-/Positive/--)(01038), somewhat tempers the risk. (KL)