Moody's affirms Temasek

Moody's Investors Service said it affirmed the Aaa local and foreign currency issuer ratings of Temasek Holdings Pte Ltd. in response to the company's announcement that it has signed an agreement to purchase a 10% stake in The Bank of China for $3.1 billion and that it intends to subscribe to an additional $500 million worth of shares upon the bank's initial public offering in the future.

The outlook remains stable.

Moody's says its affirmation reflects the fact that Temasek's financial fundamentals are still sufficient to support the Aaa rating, although the substantial funds required for the purchases will raise its leverage and lower debt service coverage.

The Aaa rating continues to reflect Temasek's strong financial profile, underscored by its large recurring dividend income from its high-quality investment portfolio and its low level of leverage.

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