Moody's assigns A3 to CapitaLand

Moody's Investors Service said it assigned a foreign-currency issuer rating of A3 to CapitaLand Ascendas REIT (CLAR).

“CLAR's A3 issuer rating reflects its stable operating track record and income generation; diversified portfolio of good-quality industrial assets across Singapore, Australia, Europe, the U.K. and the U.S.; established market position as one of the largest industrial landlords in Singapore by asset size; and disciplined financial policies.

“Moody's expects CLAR's leverage, as measured by net debt/EBITDA, to weaken to around 8.2x in 2023 from 7.9x in 2022. This is driven by the completion of two acquisitions in the first two months of 2023. Interest coverage will weaken to around 4x in 2023 from 4.5x in 2022 amid a rising interest rate environment. The interest coverage remains appropriately positioned against the downgrade threshold of 3.5x,” the agency said in a statement.

Additionally, the agency said it considers CLAR's liquidity inadequate because of its reliance on short-term revolving credit facilities. “Nonetheless, the trust's track record of funding access and established banking relationships will likely mitigate this refinancing risk.”

The outlook is stable.

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