SUN Hung Kai Properties has gained a single-A rating for its $3 billion floating-rate note (FRN) issue, qualifying its debt for special treatment in the secondary market, subject to approval by the Hong Kong Monetary Authority (HKMA). Wharf (Holdings) is the only other Hong Kong company to seek a rating so its debt can qualify as a liquefiable asset and for access to the HKMA's liquidity adjustment facility. Wharf's $2.3 billion FRN was approved last month. Sun Hung Kai enjoyed a uniquely strong position in both property development and investment property, Standard & Poor's said. 'The company's property development business is supported by a low-cost land bank, large number of diverse projects and proven track record. 'These characteristics mitigate the above-average risks associated with property development.' The agency said Sun Hung Kai was Hong Kong's biggest landlord and its broad portfolio of properties generated the second-highest amount of rental income among Hong Kong property companies last year. However, the outlook was negative because of the uncertain outcome of prolonged negotiations between Britain and China over the territory's legislative arrangements. Sun Hung Kai could be unpredictably influenced longer-term by Hong Kong's economic and social integration with China, the agency said. 'The company is well-positioned for a potential downturn in the market due to its conservative use of debt financing and cautious approach to new ventures.' Like many local companies, its debt was largely bank financing but its large cash balance and minimal amount of secured debt provided financial stability, the agency said. Sun Hung Kai launched its FRN last month; originally only seeking $1.5 billion, the deal was increased to $3 billion. The borrowing was in the name of Sun Hung Kai Properties International Treasury, and Sun Hung Kai Properties guaranteed the debt. A company spokesman said the group had not yet heard from the HKMA on whether its debt would qualify as liquefiable asset and for access to the liquidity adjustment facility. Liquefiable asset status makes paper more popular with bank investors, which have to report on their liquidity positions to the HKMA every month. Banks have to maintain a proportion of their assets in liquid assets such as cash or government bonds or other qualifying or rated instruments.