Moody's Investors Service has placed Swire Pacific and its subsidiaries' debts under review for a possible downgrade. Moody's said the reassessment reflected concerns over Swire's changing business profile from that of a diversified conglomerate to a company more reliant on its property development and investment dealings. 'This greater dependence on property income, resulting from the weak performance of its aviation and industrial businesses and reduction of ownership . . . may increase the volatility of Swire's financial position,' the US-based credit assessor said. It added the severe downturn in the property market was also a rating concern. Swire executive director Peter Johansen said he felt the move by Moody's was 'not justified at all'. Mr Johansen admitted that given the economic environment 'it was inevitable that profits would come under pressure'. 'However, the high quality of our property investments means that, despite a severe property downturn, our liquidity does not just dry up,' he said. Mr Johansen said Swire had a liquidity coverage of more than eight times and 14 per cent gearing at the end of the last financial year. 'We are in a good financial position . . . there is no question of us not being able to meet financial obligations. Something pretty catastrophic would have to happen to affect us significantly,' Mr Johansen said. 'I would be very disappointed if Moody's were to downgrade Swire's credit rating.' The ratings under review include the A3 rating on the senior global notes issued by Swire Pacific and on the guaranteed eurobonds issued by Swire Pacific Finance International. Lehman Brothers investment analyst Philip Tulk said Moody's revaluation of Swire's credit risk was endemic of the entire property sector. Balance sheets holding larger proportions of property investments were losing their allure for investors since there was a danger that both capital values and cash generation from rentals would continue to decline, Mr Tulk said. However, Swire had refinanced a large part of its debt last year prior to the economic turmoil, which in hindsight, was a prescient move, Mr Tulk said.