Hong Kong, May 07, 2013 -- Moody's Investors Service has today assigned a Baa2 rating with a stable
outlook to the Euro-denominated Subordinated Guaranteed Perpetual
Capital Securities which are to be issued by Hutchison Whampoa Europe
Finance (13) Limited and irrevocably and unconditionally guaranteed on
a subordinated basis by Hutchison Whampoa Ltd ("HWL", rated A3 stable).
RATINGS RATIONALE
Moody's considers the proposed perpetual securities as hybrid instruments
and the Baa2 rating reflects the cumulative and deeply subordinated nature
of these securities
"Moody's anticipates that the proceeds of the hybrid will
be used primarily for the refinancing of existing debt falling due in
2013, which will serve to term out the debt maturity profile and
is credit positive for HWL's overall credit profile," says
Laura Acres, a Moody's Senior Vice President.
Given the partial equity treatment applied to these securities,
the hybrid issuance will help to maintain the broadly improving trend
in HWL's financial metrics. Overall, HWL's book leverage,
as measured by reported net debt/capitalization, improved to 23.5%
in 2012, down from 25.3% as of December 2011.
On an adjusted basis, net debt/capitalization ratio was unchanged
from the June 2012 interim position at 40.3% and was slightly
stronger than 2011's 41.3%.
"While the impact of these transactions on HWL's cash flow/debt
metrics is less prominent, there should be a slight improvement
by H1 2013, for example, funds from operations (FFO)/net debt
of about 16.6% as of December 2012 should move marginally
closer to 20% by year-end in part due to accounting treatment
of the various hybrids and expected ongoing improvements in FFO contributions
from key business units, particularly 3 Group Europe and Retail,
" adds Acres, also Moody's Lead Analyst for HWL.
HWL's ratings were assigned by evaluating factors that Moody's considers
relevant to the credit profile of the issuer, such as the company's
(i) business risk and competitive position compared with others within
the industry; (ii) capital structure and financial risk; (iii)
projected performance over the near to intermediate term; and (iv)
management's track record and tolerance for risk. Moody's compared
these attributes against other issuers both within and outside HWL's
core industry and believes HWL's ratings are comparable to those
of other issuers with similar credit risk.
HWL is one of the largest Hong Kong-based conglomerates with a
strong presence in Asia and Europe. Its six core businesses are:
(1) ports and related services; (2) property and hotels; (3)
retail; (4) telecommunications; (5) energy; and (6) infrastructure.
REGULATORY DISCLOSURES
For ratings issued on a program, series or category/class of debt,
this announcement provides certain regulatory disclosures in relation
to each rating of a subsequently issued bond or note of the same series
or category/class of debt or pursuant to a program for which the ratings
are derived exclusively from existing ratings in accordance with Moody's
rating practices. For ratings issued on a support provider,
this announcement provides certain regulatory disclosures in relation
to the rating action on the support provider and in relation to each particular
rating action for securities that derive their credit ratings from the
support provider's credit rating. For provisional ratings,
this announcement provides certain regulatory disclosures in relation
to the provisional rating assigned, and in relation to a definitive
rating that may be assigned subsequent to the final issuance of the debt,
in each case where the transaction structure and terms have not changed
prior to the assignment of the definitive rating in a manner that would
have affected the rating. For further information please see the
ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
For any affected securities or rated entities receiving direct credit
support from the primary entity(ies) of this rating action, and
whose ratings may change as a result of this rating action, the
associated regulatory disclosures will be those of the guarantor entity.
Exceptions to this approach exist for the following disclosures,
if applicable to jurisdiction: Ancillary Services, Disclosure
to rated entity, Disclosure from rated entity.
Please see www.moodys.com for any updates on changes to
the lead rating analyst and to the Moody's legal entity that has issued
the rating.
Please see the ratings tab on the issuer/entity page on www.moodys.com
for additional regulatory disclosures for each credit rating.
The first name below is the lead rating analyst for this Credit Rating
and the last name below is the person primarily responsible for approving
this Credit Rating.
Laura Acres
Senior Vice President
Corporate Finance Group
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077
Gary Lau
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077
Releasing Office:
Moody's Investors Service Hong Kong Ltd.
24/F One Pacific Place
88 Queensway
Hong Kong
China (Hong Kong S.A.R.)
JOURNALISTS: (852) 3758 -1350
SUBSCRIBERS: (852) 3551-3077
Moody's assigns a Baa2 rating to Hutchison's proposed hybrid