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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.

On 18 August 2020, Moody's affirmed the credit ratings of CLP Holdings (A2), CLP Power Hong Kong (A1) and CAPCO (A1) 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, CAPCO's robust power purchase agreement with CLP Power Hong Kong, 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 opined that CLP Group's significant electricity business exposure outside Hong Kong will remain manageable but faces challenges of carbon transition while there is increasing capital spending in the Scheme of Control business with reduced regulatory rate of return. 

On 17 August 2020, 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 strong 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 and aging assets amid competitive energy market.

 

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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