CSG assigned A+ rating for foreign currency issuance

Fitch Ratings, a US-based financial ratings agency, has assigned China Southern Power Grid Company (CSG) a “Long-Term Foreign Currency Issuer Default Rating (IDR)” of “A+” and a senior unsecured rating of “A+,” according to Reuters.
Meanwhile, CSG’s Hong Kong subsidiary was assigned a Long-Term Foreign Currency IDR of “A” and a senior unsecured rating of “A.”
The state-owned power grid operator controls a monopoly in the southern five provinces of China – Guangdong, Guangxi, Yunnan, Guizhou and Hainan – providing a power grid network to around 230 million residents.
CSG is also a major electricity supplier to both Hong Kong and Macau, having recently installed a new electricity grid to power the port and theme park in Hengqin.
China Southern Power Grid International (Hong Kong) Co. (CSGI HK) has received significant support from its parent company, including the provision of guarantees for the company’s debt.
CSGI HK was ranked a grade lower than CSG in line with Fitch’s “Parent and Subsidiary Linkage” methodology. According to the same methodology, CSG’s ratings take into consideration Fitch’s overall rating of China as a country (A+/Stable).
The state-backed company is considered a crucial component in the central government’s strategy of stabilizing geographical energy demand-supply imbalances across the country. It also aligns with China’s goal to promote cleaner forms of energy in the future.
The agency’s rating therefore takes into consideration the strategic importance of the company to China, and the financial support available to the company, in assessing the appeal of China Southern Power Grid’s investment. Staff reporter