Moody's downgraded Singapore-based Frasers Centrepoint Trust and revised its outlook to negative from stable due to the severe credit shock created by the new coronavirus outbreak, deteriorating global outlook and falling oil and asset prices.
The rating agency said March 25 that it downgraded the issuer rating of the mall-focused real estate investment trust to Baa2 from Baa1.
The downgrade reflects the view that Frasers Centrepoint Trust's credit metrics are unlikely to recover to levels appropriate for a higher rating over the next 12 to 18 months, Moody's said. The trust's issuer rating reflects its stable income stream from good-quality, well-located suburban retail malls in Singapore.
Meanwhile, the negative outlook reflects the expectation that a prolonged coronavirus outbreak will delay the recovery in the trust's credit metrics.
Due to the impacts of the new coronavirus, Moody's base case now assumes that the trust will generate around S$150 million of EBITDA in fiscal 2020, which will result in net debt/EBITDA of around 8.3x.
As of March 25, US$1 was equivalent to S$1.45.