Core Viewpoint - CK Hutchison Holdings is in the process of a controversial ports divestment and has secured an upper medium-grade rating for its planned bond issuance, which may serve as a catalyst for a potential rating upgrade [1][3]. Group 1: Bond Issuance - Fitch Ratings assigned an A- rating to CK Hutchison's planned bond issuance, while S&P Global Ratings rated it an A [1]. - The size and pricing of the notes have not yet been determined, and the proceeds are expected to be used for refinancing and general corporate purposes [2]. Group 2: Company Profile and Financial Management - Fitch analysts noted that the rating reflects CK Hutchison's strong business profile, geographical diversification, prudent financial management, and stable cash flow from its high-quality port, retail, infrastructure, and telecommunications businesses [3]. - The firm's credit profile is anticipated to improve if the port asset sale is completed, although further details on the post-transaction capital structure are needed for a final assessment [4]. Group 3: Ports Divestment - The planned debt sale follows comments from CK Hutchison's co-managing director regarding a reasonable chance of reaching an agreement on the company's ports assets, which include two facilities on the Panama Canal [5]. - In March, CK Hutchison announced a US$23 billion sale of 43 overseas ports to a BlackRock-led consortium, which faced criticism due to geopolitical concerns [6]. - After the deal's deadline lapsed, CK Hutchison indicated it would invite a mainland Chinese firm to the consortium to address Beijing's concerns, with reports suggesting Cosco Shipping as a potential partner [6].
Li Ka-shing-controlled CK Hutchison's bond sale gets strong rating from Fitch, S&P