The Group's entities have maintained good investment grade credit ratings.
On 31 May 2016, Standard & Poor's (S&P) revised the rating outlooks of CLP Holdings and CLP Power Hong Kong to positive from stable and affirmed the A- and A credit ratings of the two companies. This rating action reflects S&P's view that (i) CLP Holdings' deleveraging in 2015 was better than S&P's expectation; (ii) the strong operations of CLP Power Hong Kong; (iii) relatively steady overseas operations; and (iv) the prospects of fairly limited acquisitions over the next two years.
On 10 May 2016 and 24 March 2016, Moody's affirmed the A2 and A1 credit rating of CLP Holdings and CLP Power Hong Kong respectively with stable outlooks. The credit ratings reflect (i) the large earnings contributions from CLP Power Hong Kong, which has strong and predictable cash flows and operates in a highly stable regulatory environment; (ii) sound liquidity profile, supported by good access to the domestic and international bank and capital markets; and (iii) well-managed debt maturity profile. At the same time, CLP Holdings' credit rating is constrained by the weak but steady performance of its Australian operations.
On 26 July 2016, S&P upgraded the rating of EnergyAustralia to BBB from BBB- with outlook revised to positive from stable. This reflects the strengthening of EnergyAustralia's financial risk profile after the significant pay-down of external debt with proceeds from Iona asset sale and a target capital structure that EnergyAustralia would like to sustain. The positive outlook reflects S&P's expectations that EnergyAustralia's rating could move higher if it can resolve fuel supply issues at Mount Piper, maintain operational stability and sustain target leverage.