ข่าวประชาสัมพันธ์การเงิน/หลักทรัพย์

Australian Gas Networks Ltd. Ratings Raised To ‘A-‘ Following Upgrade Of The Parent, CKI; Outlook Stable

          MELBOURNE (S&P Global Ratings) Sept. 24, 2018--S&P Global Ratings said today that it has raised the issuer credit rating on Australian Gas Networks Ltd. (AGN) to 'A-' from 'BBB+'. The outlook on the long-term rating is stable. 
          At the same time, we raised the rating on AGN's senior secured facilities to 'A-' from 'BBB+'. We also affirmed the short-term rating of 'A-2' and the 'AA' rating on the monoline guaranteed instrument. 
          AGN operates a regulated monopoly gas distribution business on Australia's eastern seaboard.
          We raised the rating on AGN following a similar action on its majority shareholders, CK Infrastructure Holdings Ltd. and Power Assets Holdings Ltd. (PAH; together referred to as the CKI Group). The upgrade reflects the company's stable regulated earnings profile, and CKI Group's commitment toward maintaining AGN's credit profile.
          We believe that AGN will continue to benefit from CKI Group's ownership and oversight, and view AGN as a moderately strategic asset for the group. CKI Group has a track record of supporting its assets in Australia, and we believe that AGN is also likely to receive support should the need arise. Furthermore, AGN has been successful in its Australian operations and the CKI Group is unlikely to sell its stake in the company in the near term. The strengthened credit profile of the CKI Group, along with our view on the expected support, now results in a one-notch uplift from the 'bbb+' stand-alone credit profile of AGN. 
          AGN's underlying credit profile of 'bbb+' remains unchanged. Underpinning this strength is AGN's established position as an operator of a regulated monopoly gas distribution business on Australia's eastern seaboard. The current regulatory tariff reset parameters, which are set until July 2021, support AGN's ability to maintain funds from operations (FFO) to total debt at about 9.5%-10.5% over the next two to three years. 
          The stable outlook on AGN reflects the company's high cash flow certainty for the next two to three years, given that the regulatory parameters are set until July 2021, as well as the continued support from CKI Group. We expect AGN to sustainably operate with FFO to debt in the range of 9.5%-10.5%, which supports its underlying credit profile. 
          A fall in AGN's cash flow leverage sustainably below 8%, with no clear action plan to restore it, could result in a downward rating action. 
          An upgrade is unlikely given that it would require a step-change in AGN's metrics, along with the commitment of management and shareholders to maintain a stronger profile as a threshold. This is assuming no material change occurs in AGN's business composition.