(The following statement was released by the rating agency)
Feb 24 - Fitch Ratings has assigned Mapletree Industrial Trust Treasury Company Pte. Ltd.'s (MITT) proposed SGD fixed-rate notes due 2019 an expected rating of 'BBB+(exp)'. The final rating of the notes is contingent upon the receipt of documents conforming to information already received.
The notes will be issued out of a SGD1bn multi-currency MTN programme and will constitute direct, unconditional, unsubordinated and unsecured obligations of MITT and MITT's guarantor, DBS Trustee Limited. The latter acts as trustee for Mapletree Industrial Trust (MIT; 'BBB+'/Stable).
The rating is supported by MIT's granular industrial property portfolio across Singapore with a diversified tenant base and access to main transport links. MIT has demonstrated stable operating performance, high occupancy rates and adequate debt service coverage.
The rating also reflects MIT's tight liquidity coverage and geographical concentration in Singapore, as well as the inherent cyclicality of the industrial property market.
MIT may continue to benefit from rental escalations in its non-business park buildings as a result of the expiry of the rental cap imposed by JTC Corporation on its non-business park buildings acquired in 2008. However, this increase is likely to be moderated by a potential decline in the rentals of business park buildings and a stagnant industrial rental market in general as a result of the uncertain global economy.
The proposed notes are expected to refinance part of MIT's existing debt. Should this happen, MIT's liquidity coverage would improve to an estimated 0.8x from 0.6x. Liquidity coverage is defined as internal liquidity sources (cash balance, cash from operations after dividend and undrawn committed revolving credit facilities) divided by uses of liquidity (including CAPEX and maturing debt), over the next two years. Fitch notes that MIT's refinancing risk is manageable given its proven access to capital markets, quality assets and healthy financials.
MIT is an industrial real estate investment trust listed in the Singapore Stock Exchange since October 2010. At end-December 2011, its portfolio comprised 81 industrial properties across Singapore, with flatted factories representing 60.4% of the portfolio's property value, followed by business park buildings (18.2%), stack-up/ramp-up buildings (each level within the buildings has its own dedicated loading areas, 13.3%), light industrial buildings (7.1%) and a warehouse (1.0%). Mapletree Investments Pte Ltd is the largest shareholder of MIT with an approximate 30% stake.
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