Moody’s eyes two Mapletree entities

Moody’s Investors Service said it placed the ratings of Mapletree Commercial Trust, including its Baa1 issuer rating, and Mapletree Commercial Trust Treasury Co. Pte. Ltd. on review for downgrade and the ratings of Mapletree North Asia Commercial Trust on review for upgrade. The outlooks for MCT and Mcttc was stable

The agency also placed on review for upgrade the Baa3 guaranteed senior unsecured rating on the notes under Mapletree North Asia Commercial Treasury Co. (HKSAR) Ltd.'s EMTN program. DBS Trustee Ltd., in its capacity as the trustee of Mnact, guarantees the notes of Mapletree North Asia Commercial Treasury and programs of Mapletree North Asia Commercial Trust Treasury Co. (S) Pte Ltd. and Mapletree North Asia Commercial Treasury Co. The outlooks for Mapletree North Asia and Mapletree North Asia Commercial Trust Treasury Co. (S) was stable before being placed on review.

The review follows the Dec. 31 announcement of the proposed merger of MCT and Mnact. The merger is to be conducted through the acquisition by MCT of all the issued and paid-up units in Mnact by way of a trust scheme of arrangement, the agency said. The transaction is expected to close by the end of 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. However, the final impact remains uncertain as the merger is still subject to, amongst others, the approval of the unitholders," said Junling Tan, a Moody's analyst, in a press release.

"The review for upgrade reflects our expectation that Mnact's rating could benefit from its 100% ownership by MCT, following the completion of the proposed merger. However, the final impact on Mnact's rating will depend on our assessment of the likelihood of extraordinary support that MCT will provide to MNACT in case of distress," added Tan.

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