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Moody’s Reviews MCT For Downgrade, MNACT For Upgrade Amid Proposed Merger (The Business Times)

January 6, 2021 – Moody’sInvestors Service has placed the Baa1 issuer rating of Mapletree Commercial Trust (MCT) on review for downgrade, ahead of its planned merger with Mapletree North Asia Commercial Trust (MNACT) in a S$4.2 billion deal.

Concurrently, Moody’s is reviewing MNACT’s Baa3 rating for an upgrade, the credit rating agency announced on Wednesday (Jan 5) after trading hours.

On Dec 31, MCT and MNACT proposed a merger that would give the combined entity a theoretical market cap of S$10.5 billion, making it the seventh-largest Reit in Asia. The transaction is expected to close by end-June.

“The review for downgrade reflects the potential weakening of MCT’s credit metrics and uncertainty around its financial policy following the merger with MNACT,” said Moody’s analyst Tan Junling.

The deal could raise MCT’s leverage, considering MNACT’s weaker leverage profile and the incurrence of incremental debt and perpetual securities to fund the merger’s cash consideration, Moody’s noted.

Read more here..

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