Ranting over credit ratings

HONGKONG (October 21): DEBT-FREE Hongkong does not want another credit assessment from Standard and Poor's - nor is co-operating with the US-based credit agency.

But Hongkong could get another assessment anyway.

Last year, Standard and Poor's wrote a few paragraphs assessing the risk to creditors of lending to the territory - even though Hongkong has no external debt and is not seeking any loans.

Standard and Poor's is now in the final stages of compiling its second assessment of Hongkong using only information available to the public. The Government views the rating as unwelcome and is distancing itself from last year's and the current assessment.

'We are not providing information that people have to get to do a proper rating . . . because from the very nature of it, we are not asking for it. We are not in the business of revealing confidential information,' said Secretary for Monetary affairs David Nendick. Flush with money under the balanced budget policy, the Government has only borrowed once in the local market, through a bond issue for $1 billion in 1984.

In Mr Nendick's opinion, the agency's first assessment on the territory was not exactly one with depth and insight. He even described the political assessment contained in that commentary as 'misconceived'.

Mr Nendick expects this year's effort to be as superfluous as last year's.

According to Mr Nendick, the Government had some general discussions with the rating agency earlier this year when it was preparing a credit rating on debt issued by the Mass Transit Railway Corp (MTRC).

But the Government had made it clear to Standard and Poor's that the meeting was in the context of the MTRC rating only, he said.

The MTRC, wholly owned by the Government, recently received an A-plus rating for its $3 billion dual currency medium-term note program.