In our opinion, SKC's stable cash flow underpinned by its monopoly position in New Zealand and additional cash inflow from recent noncore asset sales should build its balance-sheet headroom. Our forecasts expect the company's debt-to-EBITDA ratio to be below 3.0x at the peak of its development program in 2020. In our view, the group remains committed to maintaining the 'BBB-' rating, with a company net debt-to-EBITDA policy of 2.0x–2.5x over the next two years at least. We believe SKC will appropriately manage its capital and the execution risks associated with the group's large development program. The stable outlook assumes that SKC will manage its major developments in Auckland and Adelaide within rating tolerances over the next few years. S&P Global
