(The following was released by the rating agency)
HONG KONG (Standard & Poor‘s) Jan. 9, 2013--Standard & Poor’s Ratings Services today assigned its ‘BBB+’ long-term issue rating and its ‘cnA+’ long-term Greater China regional scale rating to a proposed issue of U.S. dollar-denominated senior unsecured notes by Hysan (MTN) Ltd. The issuance is under the company’s US$1.0 billion medium-term notes program and is guaranteed by Hysan Development Co. Ltd. (Hysan: BBB+/Stable/--; cnA+/--), a Hong Kong-based real estate investor. Hysan will use the issuance proceeds to refinance its existing debt and for general corporate purposes.
The issuer rating on Hysan reflects the company’s growing recurring rental income from its portfolio of well-located investment properties. The rating also reflects Hysan’s low leverage, conservative and consistent financial management, and “exceptional” liquidity, as defined in our criteria. Hysan’s small scale and the high geographic concentration of its property portfolio temper the above strengths. We assess the company’s business risk profile as “satisfactory” and its financial risk profile as “modest,” as our criteria define these terms.
In our opinion, Hysan has improved the scale, quality, and tenancy mix of its portfolio following the completion of its new retail and office property, Hysan Place, in Causeway Bay, one of Hong Kong’s major commercial and retail districts. The addition of the property has also improved the company’s competitive position in the district.
The stable outlook on the rating on Hysan reflects our expectation that the company will maintain its solid market position in Causeway Bay and generate increasing cash flows and profits in a favorable commercial property market in the next 12-24 months. We also expect the company to maintain low leverage and strong liquidity.
-- Research Update: Hysan Development Co. Ltd. Upgraded To ‘BBB+’ On Project Execution, Improving Leasing Income, And Low Leverage, Dec. 6, 2012
-- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
-- Key Credit Factors: Global Criteria For Rating Real Estate Companies, June 21, 2011
-- 2008 Corporate Criteria: Analytical Methodology, April 15, 2008