S&P affirms SMRT

Standard & Poor's said it has affirmed its AAA long-term corporate credit rating on SMRT Corp. Ltd.

The outlook is stable.

S&P said the rating on SMRT reflects a very supportive regulatory and transport policy framework that facilitates SMRT's sound operations and financial viability, its strategic position in Singapore's developing duopolistic public transport sector, a robust financial profile and a supportive government.

Cash flow measures continue to remain very strong, with EBITDA interest cover above 16x and funds from operations to total debt above 75% in fiscal 2005, even under lower average fares. S&P said it expects debt to EBITDA ratio to remain below 2x in the near term.

SMRT receives no guarantees, but as a government-linked corporation its credit quality is enhanced by its 54.7% ownership by the Singapore government (AAA/stable/A-1+) through Temasek Holdings Pte Ltd. (AAA/stable/), the agency said.

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