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Credit Ratings

CLP Group entities achieved good credit rating result in annual review.

On 20 July 2020, Standard & Poor's ("S&P") affirmed the A credit rating of CLP Holdings with stable outlook.  S&P opined that CLP Holdings' Hong Kong business benefits from a transparent and predictable regulatory framework that allows generation of highly visible and stable operating cash flow, noting the Group also has unregulated power generation business outside of Hong Kong, with the Australian business being more volatile and the profitability is under near-term pressure.  On 19 June 2020 and 15 June 2020, S&P affirmed the A+ and AA- credit ratings of CLP Power Hong Kong and CAPCO respectively with stable outlooks. S&P opined that CLP Power Hong Kong and CAPCO benefit from a favorable regulatory regime, which allows regulated utilities to operate in an open and transparent landscape.  The COVID-19 pandemic has limited impact on Scheme of Control business as profitability is protected under regulated regime.  S&P views both CLP Power Hong Kong and CAPCO are insulated subsidiaries of CLP Holdings. The regulatory framework largely ring-fences the companies' operations, and the financial performance and funding are highly independent from CLP Holdings.

Between 28 - 29 May 2020, Moody's affirmed the A2 and A1 credit ratings of CLP Holdings and CLP Power Hong Kong respectively with stable outlooks.  The credit ratings reflect the large earnings contribution from CLP Power Hong Kong with strong and highly predictable cash flow supported by a highly stable regulatory environment, the CLP Group's strong and adequate financial metrics despite moderation, well-managed debt maturities, sound liquidity profile and good access to the domestic and international banks and capital markets. At the same time, Moody's noted significant business exposure outside Hong Kong, carbon transition risks and increasing capital spending of CLP Power Hong Kong with reduced regulatory rate of return.  On 1 June 2020, Moody’s affirmed A1 credit rating of CAPCO with stable outlook.  This rating reflects the company’s predictable cash flow and low-risk business profile, which are underpinned by its robust power purchase agreement with CLP Power Hong Kong and the stable regulatory environment in Hong Kong.

On 29 November 2019, S&P affirmed EnergyAustralia's BBB+ credit rating with stable outlook.  This reflects EnergyAustralia's position as one of the largest vertically integrated energy utilities in Australia, with significant balance-sheet capacity to undertake growth-related investments.  At the same time, S&P noted EnergyAustralia's operating challenges including coal quality issues at Mount Piper Power Station, as well as the impact of default retail price regulations.

 

CLP HoldingsCLP Power HKCAPCOEnergyAustralia
Standard &
Poor’s
Moody'sStandard &
Poor’s
Moody'sStandard &
Poor’s
Moody'sStandard &
Poor’s
Long-term Rating
Foreign CurrencyCLP HoldingsAA2CLP Power HKA+A1CAPCOAA-A1EnergyAustraliaBBB+
OutlookCLP HoldingsStableStableCLP Power HKStableStableCAPCOStableStableEnergyAustraliaStable
Local CurrencyCLP HoldingsAA2CLP Power HKA+A1CAPCOAA-A1EnergyAustraliaBBB+
OutlookCLP HoldingsStableStableCLP Power HKStableStableCAPCOStableStableEnergyAustraliaStable
Short-term Rating
Foreign CurrencyCLP HoldingsA-1P-1CLP Power HKA-1P-1CAPCOA-1+P-1EnergyAustralia--
Local CurrencyCLP HoldingsA-1P-1CLP Power HKA-1P-1CAPCOA-1+P-1EnergyAustralia--

 

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