Fitch ups Swire Pacific view to stable

Fitch Ratings said it revised the outlook on Swire Pacific Ltd.'s long-term foreign-currency issuer default rating to stable from negative, while affirming it at A. The agency also said it affirmed its foreign-currency senior unsecured ratings at A.

The outlook revision is underpinned by the better-than-expected recovery of the Hong Kong commercial property market and its key associate, Cathay Pacific Airways Ltd., Fitch said.

The ratings are supported by the gradual incremental cash flow from Swire's China properties in the next 12 to 18 months, as well as the expected reduction of future borrowing level and capital expenditure, the agency said.

This is contrary to a previous expectation that Swire may suffer from the potential downturn in the Hong Kong property market, Fitch said, and that the prolonged downturn in the aviation market would affect Cathay.

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