S&P trims Hong Kong and China Gas

S&P said it downgraded Hong Kong And China Gas Co. Ltd.’s issuer rating to A- from A. The agency also lowered a notch the ratings on Towngas (Finance) Ltd. and HKCG (Finance) Ltd. and guaranteed by Hong Kong and China Gas.

“We lowered the rating because we expect HKCG's ratio of FFO to debt in the next 12-24 months will remain below 30%, the threshold for an A rating. The high level of debt-funded capital expenditure (capex) and dividend payment will continue to weigh on the company's financial recovery pace this year and next,” S&P said in a press release.

The agency said it forecasts an increase in annual capital expenditures to HK$7.6 billion-HK$8.5 billion over 2021-2023 to fulfill the group's five-year development plan in smart energy and distributed solar projects.

The outlook is stable.

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