Moody’s drops Ascott REIT view to negative

Moody's Investors Service said it affirmed Ascott Residence Trust's Baa3 issuer rating.

The agency also affirmed the provisional Baa3 senior unsecured rating on the S$1 billion multicurrency medium-term securities program issued by Ascott REIT MTN Pte. Ltd. — a wholly owned subsidiary of Ascott REIT — and the Baa3 ratings on the senior unsecured notes issued under the program.

The outlook on all ratings was changed to negative from stable.

"The change in the ratings outlook to negative reflects the continued weakening of Ascott REIT's leverage profile," Moody's vice president and senior analyst Jacintha Poh said in a news release.

"The trust's adjusted debt/total deposited assets for example, was at around 46% as of 30 June 2016, a result which exceeded the parameters for its Baa3 ratings."

"Nevertheless, Ascott REIT's adjusted debt/total deposited assets should improve to around 43%-44%, depending on the proportion of equity funding used for its committed purchase of Ascott Orchard Singapore," Poh added in the release.

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