NEW YORK-Moody’s Investors Service, London, announced it has placed the long-term ratings of about $4 billion of Cable & Wireless plc debt under review for possible downgrade because of the carrier’s business exposure in Hong Kong.
The rating agency said it is reviewing concurrently for possible downgrade the long-term foreign currency ceiling of Hong Kong.
London-based Cable & Wireless plc “is highly exposed to Hong Kong’s sovereign risk through its controlling equity stake in Hong Kong Telecom, (which) is likely to remain the primary contributor of C&W’s retained cash flow over the intermediate term,” said Eric de Bodard, managing director, and Carlos Winzer, vice president, of Moody’s European corporate ratings group.
The review also encompasses debt issued by Cable & Wireless Communications, a cable television company majority owned by Cable & Wireless plc, as well as debt issued by Cable & Wireless International Finance B.V. and guaranteed by Cable & Wireless plc.
“Moody’s review will focus on the extent to which C&W plc’s financial flexibility, recent asset sales and investments and conservative financial policies will offset the group’s exposure to Hong Kong Telecom,” the analysts said.
