S&P Revises Outlook on CAS Holding to Negative as Parent PCCW Sees Increased Leverage Pressure

MT Newswires Live07-03

S&P Global Ratings revised its outlook on CAS Holding's rating to negative from stable, due to a potential rise in parent PCCW's (HKG:0008) debt-to-EBITDA ratio above 4.5x amid shareholder-leaning dividend policies and further media business investments, the rating agency said in a Wednesday note.

The proposed sale of PCCW subsidiary HKT's (HKG:6823) 40% stake in a wireline network business will maintain the parent's leverage at around 4.5x, S&P said, although it added that "each incremental sale will reduce the company's ability to further deleverage."

"Leverage will remain under longer-term pressure due to the annual cash flow deficit (after shareholder returns) of over HK$3 billion," the rating agency said.

S&P affirmed CAS Holding's BBB- long-term issue credit rating, saying that it views the company as a core PCCW subsidiary and holding its parent's most important assets, including a 52.5% interest in HKT Trust and HKT.

Price (HKD): $3.90, Change: $-0.02, Percent Change: -0.51%

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