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S&P upgrades Cheung Kong Property Holdings ratings

S&P Global Ratings upgraded Cheung Kong Property Holdings Ltd.'s long-term corporate credit rating to A from A-, with a stable outlook.

The rating agency also upgraded its long-term issue rating on the company's guaranteed senior unsecured debt to A from A- and affirmed its cnAA+ long-term Greater China regional scale rating on the company and its guaranteed senior debts.

The rating agency attributed the upgrades to CKP's good financial position and the agency's expectation that the company can absorb active investments, given its strong cash flow from property sales and increasing recurring income.

S&P expects CKP's financial leverage to increase, given its nonproperty investments that totaled about HK$30 billion in early 2017. The agency projects that CPK's debt-to-EBITDA ratio will increase to about 2.3x in 2017 and 2018, from about 1.5x in 2016.

The stable outlook, meanwhile, reflects S&P's expectations that the company will remain careful in its new investments, which will lead to an increase in the company's recurring income, and that the company's core property business will continue to have steady contracted sales and stable rental income.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.