Moody’s Affirms Frasers Centrepoint’s Baa2 Rating On ARF Acquisition; Changes Outlook To Stable From Negative
September 9, 2020 – Moody’s Investors Service has affirmed Frasers Centrepoint Trust’s (FCT) Baa2 issuer rating.
At the same time, Moody’s has changed the outlook on the rating to stable from negative.
The rating action follows FCT’s announcement on 3 September that it will (1) acquire the balance 63.1% stake in AsiaRetail Fund Limited (ARF); (2) raise up to SGD1.3 billion through an equity offering; (3) divest Bedok Point for SGD108 million.
“The affirmation of FCT’s Baa2 rating balances Moody’s expectation that FCT’s business profile will improve considerably following the completion of the proposed acquisition, but that its leverage will remain elevated over the next 12-18 months,” says Sweta Patodia, a Moody’s Analyst.
“The change in outlook to stable reflects FCT management’s commitment to maintain its credit profile as evidenced by its planned equity issuance and asset disposal, which in turn will also help to enhance the trust’s liquidity profile. The change in outlook also takes into account the improvement in tenant sales and shopper traffic at FCT’s retail malls, which have rebounded strongly following a sharp slump during the circuit breaker period in Sinagpore,” adds Patodia, who is also Moody’s Lead Analyst for FCT.
The transaction remains subject to unitholder approvals and is expected to close over the next 2-3 months.
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