Fitch upgrades CapitaLand Ascott

Fitch Ratings said it upgraded CapitaLand Ascott Real Estate Investment Trust’s long-term issuer default rating to BBB from BBB-. The trust was formerly known as Ascott Real Estate Investment Trust. The agency also boosted the REIT’s S$485 million of senior unsecured notes and S$2 billion medium-term note program to BBB from BBB-. The special purpose vehicle Ascott REIT MTN Pte. Ltd. is the issuer and DBS Trustee Ltd. guarantees the notes.

“The upgrade reflects Ascott REIT's business recovery and sharp deleveraging in 2022, which we expect to be sustained into 2023, despite economic challenges in some markets. We forecast EBITDA net leverage to fall to around 8.5x during the year, well below the 9.5x threshold for the BBB rating. The trust's geographically diversified portfolio of lodging assets, significant cash flow from stable income sources, such as master leases and management contracts with minimum guaranteed income, and longer-stay properties support its ratings,” the agency said in a press release.

The outlook is stable.

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