CK Hutchison's Proposed Senior Unsecured Notes Rated 'A'

HONG KONG (S&P Global Ratings) Sept. 3, 2019--S&P Global Ratings today assigned its 'A' long-term issue rating to CK Hutchison International (19) (II) Ltd.'s proposed senior unsecured U.S.-dollar notes. CK Hutchison Holdings Ltd. (A/Stable/--) unconditionally and irrevocably guarantees the notes.
The proceeds will be used for refinancing maturing U.S.-dollar notes. The issue rating is subject to our review of the final issuance documents. We equalize the rating on the guaranteed notes with the issuer credit rating on CK Hutchison, given the proportion of secured debt plus subsidiaries' unsecured debt to the issuer's total debt is below our notching threshold of 50%. Most of the company's debt is unsecured at the holding level.
The stable outlook on CK Hutchison reflects our expectation the company will prudently manage its financial leverage. While we expect CK Hutchison to maintain capital expenditure and pursue investments, the company's strong cash generation and large liquidity balance provide a good financial buffer for these activities. We anticipate the company will be highly committed to preserving conservative financial metrics commensurate with the rating.
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