Business

S&P downgrades HK rating to AA+

HONG KONG: Standard and Poor's lowered Hong Kong's long-term rating from AAA to AA+ yesterday following its earlier downgrade of China's sovereign rating.

"We see very strong institutional and political linkages between China and the Special Administrative Region of Hong Kong.

"Following the earlier downgrade of the sovereign credit rating on China, we are lowering the rating on Hong Kong to reflect potential spillover risks to the SAR should deleveraging in China prove to be more disruptive than we currently expect," S&P said in a statement.

The rating agency downgraded China from AA- to A+ on Thursday, citing debt risk, Reuters reported.

S&P changed Hong Kong's outlook to stable from negative yesterday, and said it expected Hong Kong to "maintain its strong credit metrics across the board in the next two to three years".

China yesterday lashed out at the decision to downgrade the country's credit rating, calling the warning against ballooning debt "mistaken" and based on "cliches" about its economy.

Debt-fuelled investment in infrastructure and property has underpinned China's rapid growth, but there are concerns that years of freewheeling credit could lead to a financial crisis with global implications. - REUTERS

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