Despite Hong Kong's gloomy economic outlook, international rating agencies have assigned a strong rating to the debt papers to be issued by property developer Hysan Development and upgraded Dao Heng Bank's credit rating.
Standard & Poor's (S&P) yesterday assigned a BBB-plus rating to the US$1 billion debt papers to be issued by Hysan.
The agency said the rating reflected Hysan's portfolio of good-quality commercial property, mostly in Causeway Bay.
'The long-term stability of Hysan's rental revenue is supported by its sound tenant profile, largely consisting of multinational corporations and large, reputable local businesses,' S&P said.
However, it said these positive factors were partly offset by the uneven structure of rental renewals, the cyclical nature of the property sector in Hong Kong and the company's geographically concentrated portfolio.
Hysan is planning to enlarge its retail space by redeveloping older buildings.
S&P expected these investment plans to provide a less volatile income stream for the company in the long term.