Published February 3, 2009

Moody's to review ratings for Singapore Reits

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MOODY'S Investor Service has said that it will review ratings for Singapore's real estate investment trusts (Reits) after downgrading the second-biggest Reit traded on the nation's exchange.

'Those Singapore Reits with refinancing risks over the next 12 months and those with weak credit metrics that are likely to be under pressure under the prevailing weakened operating environment will be reviewed closely,' Kathleen Lee, a credit analyst at Moody's, said in a reply to a query.

The worst global recession since the Great Depression has frozen credit, making it difficult for property owners to refinance maturing debt.

Moody's had on Jan 30 cut its rating for Ascendas Real Estate Investment Trust, an industrial landlord, to 'Baa1' from 'A3'. The downgrade 'reflects the trust's ongoing refinancing risk, given that it hasn't fully addressed its reliance on uncommitted revolving credit facilities to support its long-term assets', Moody's said in a statement.

Ascendas Reit slumped 5.5 per cent to $1.38 yesterday.

Ascendas Reit raised $407 million from a share sale last month and is in talks with an unidentified bank for a new $250 million, three-year committed credit facility and is seeking the extension of an existing $300 million loan that will mature in March 2010, according to a statement sent by Ascendas Funds Management Ltd to the Singapore Exchange yesterday.

Ascendas Funds 'has been taking, and will continue to take, a proactive approach towards the capital management of Ascendas Reit', the statement said.

Other Reits also fell. CapitaMall Trust, the city's biggest, fell 5.6 per cent to $1.51.

Frasers Centrepoint Trust, the shopping mall operator partly owned by the city's biggest beverage company, slipped 5.8 per cent to 65 cents.

Ascott Residence Trust, partly owned by the city's biggest developer, slumped 8.9 per cent to 51 cents. -- Bloomberg