Standard & Poor's Ratings Services Tuesday assigned ratings to the first-ever foreign currency bond issue by the Hong Kong Special Administrative Regionas well as its Hong Kong dollar bond issues.

The "A+" long-term foreign currency rating was assigned to the proposed US dollar bond due 2014, while the "AA-" long-term local currency rating was assigned to the proposed Hong Kong dollar five-year Class A1 and 15-year Class A2 bonds.

The total issue size of the foreign and local currency bonds, including an unrated retail tranche, is up to 20 billion HK dollars (2.6 billion US dollars) and the HKSAR government will announce the details of the bonds issuing Wednesday.

"Standard & Poor's sovereign credit ratings on Hong Kong reflect Hong Kong's resilient and prosperous economy, robust foreign exchange reserves, and the fact that Hong Kong is one of the few net creditor governments in the world," said Standard & Poor's credit analyst Ping Chew, director in the Asia-Pacific Sovereign & International Public Finance Ratings Group.

He said Hong Kong's fiscal reserves are above 18 percent of GDP,while per capita GDP is about 23,000 HK dollars.

"Fiscal prospects for the HKSAR government have brightened, given the economic upturn, the expected end of deflation, and rising consumer confidence," said Chew. Improvement has been made on both sides of the fiscal equation, with tighter expenditure control ahead of schedule, and revenues boosted by rising land sales and stamp duty revenues, as well as improving economic prospects.

He said the government's medium-term fiscal consolidation strategy can be underpinned by its continued commitment to expenditure and revenue discipline. Nevertheless, Hong Kong's revenue structure has to be reconfigured in future budgets, and its economic growth maintained. The stable outlook also reflects the expectation that prudent financial management and good economic prospects will be isolated from political developments.

Source: Xinhua