Fitch Revises Ascott REIT’s Outlook to Negative, Affirms IDR at ‘BBB’
August 18, 2020- Fitch Ratings has revised Singapore-based Ascott Real Estate Investment Trust’s (Ascott REIT) Outlook to Negative from Stable and affirmed the trust’s Long-Term Issuer Default Rating (IDR) at ‘BBB’.
The agency has also affirmed the REIT’s ‘BBB’ senior unsecured debt rating, as well as the ‘BBB’ long-term ratings on the REIT’s SGD2 billion multicurrency medium-term note programme and the outstanding senior unsecured notes under the programme. The notes are issued by the trust’s wholly owned subsidiary, Ascott REIT MTN Pte. Ltd., and guaranteed by DBS Trustee Limited in its capacity as trustee of Ascott REIT.
The Negative Outlook reflects the challenges facing the global travel, hospitality and lodging industry over the next 12-24 months, which are likely to constrain Ascott REIT’s operating cash flows and keep leverage elevated.
Ascott REIT was reconstituted as a stapled group – Ascott Residence Trust – following its merger with Ascendas Hospitality Trust (AH-Trust) at end-2019. The rating on Ascott REIT is based on the consolidated profile of Ascott REIT and Ascott Business Trust in light of Fitch’s view that there are strong operating and strategic linkages and complete cash fungibility between the two trusts, which the stapling deed provides. The IDR, however, applies specifically to Ascott REIT.
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