Moody’s reviews CapitaLand Commercial for lift

Moody’s Investors Service said it placed on review for upgrade CapitaLand Commercial Trust’s Baa2 issuer rating. Moody’s also placed on review for upgrade the Baa2 backed senior unsecured debt ratings issued by CCT MTN Pte. Ltd., a wholly owned subsidiary of CapitaLand Commercial Trust.

The review follows the announcement the company will merge with CapitaLand Mall Trust, which will acquire all of CapitaLand Commercial Trust’s units.

"The review for upgrade reflects our expectation that CCT’s rating could receive a potential uplift from its 100% ownership by CMT, following the completion of the proposed merger. However, the final impact on CCT’s rating will depend on our assessment of the likelihood of extraordinary support that CMT will provide to CCT in case of distress," said Junling Tan, a Moody’s Analyst, in a press release.

Moody’s said it expects CCT’s business profile and credit metrics to remain unchanged following the merger. However, CCT will no longer be separately listed and will be a sub-trust of CMT. The proposed merger will also not trigger an event of default or a change of control under CCT’s existing bonds.

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