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Holders of toll-road bonds face risks from new links

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Competition from new traffic infrastructure constitutes a major risk for holders of the government's newly issued securitisation bonds, according to credit rating agency Standard & Poor's (S&P).

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The agency has given the bonds a rating of AA-minus, the same as for the government.

Raymond Woo, a corporate and infrastructure ratings director at S&P, said the rating for the $6 billion bond offer reflected the stable income of the six government-owned toll facilities - the Aberdeen, Cross-Harbour, Lion Rock, Shing Mun and Tseung Kwan O tunnels, as well as the Tsing Ma Bridge.

It also reflects the government's promise to cover income shortfall resulting from toll-fee reductions, service interruptions and rises in operating costs.

But the agency noted transport arteries slated for completion within the next few years posed competitive risks.

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'New routes and tunnels could result in a decline in private car and bus traffic in the existing tunnels,' Mr Woo said.

'But the impact is a few years off. There would be no impact on the short-term bonds, only on the longer-term ones.'

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