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S&P affirms Hongkong Land Holdings ratings

S&P Global Ratings affirmed Hongkong Land Holdings Ltd.'s long-term issue credit rating and issue ratings on its outstanding debt at A, with a stable outlook.

The rating agency said Aug. 28 that it revised the real estate company's group status to highly strategic from strategically important to reflect its significance to the current identity and future strategy of its parent Jardine Strategic Holdings Ltd.

The agency said the affirmation reflects its expectation that Hongkong Land will maintain its strong market position and modest leverage over the next 12-24 months. It expects the company's ratio of funds from operations to debt to remain between 18% and 21% in 2019, providing limited financial capacity from a downside trigger of 15%.

The company is also expected to grow its exposure in China and Southeast Asia, while maintaining moderate exposure to property trading and adequate sales. Ratings believes that Hongkong Land will allocate less than 20% of its consolidated total assets and about 30% of its consolidated earnings before interest and tax to its business growth.

The stable outlook reflects Ratings' view that the group will generate stable cash flow from its high-quality investment properties and remain disciplined in executing its significant debt-funded investments.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.