Medium Term Notes blog update profiling Mapletree Industrial Trust’s notes receiving a Fitch Ratings of BBB+, courtesy of Reuters. Mapletree Industrial Trust is a Singapore-focused Real Estate Investment Trust (REIT) listed on the Main Board of Singapore Exchange, with a large and diversified portfolio of industrial properties. As of March 2015, their portfolio of 84 properties in Singapore is valued at approximately S$3.4 billion. An excerpt from the Reuters update is below.
Fitch Ratings has assigned Singapore-based Mapletree Industrial Trust’s (MIT; BBB+/Stable) SGD75m 3.02% senior unsecured medium-term notes issue due on 11 May 2023 a final rating of ‘BBB+’. The final rating follows the receipt of documents conforming to information already received, and is in line with the expected rating assigned on 6 May 2015. The notes are part of MIT’s SGD1bn multi-currency medium-term note programme, and will constitute direct, unconditional, unsubordinated and unsecured obligations of the issuer Mapletree Industrial Trust Treasury Company Pte Ltd and the guarantor, DBS Trustee Limited. DBS Trustee Limited acts as trustee for MIT. The trust has to-date issued SGD245m of senior unsecured notes off its MTN programme. The issue proceeds will be used to refinance part of MIT’s existing debt. This will lengthen its debt maturity profile and significantly reduce its refinancing needs. MIT has sufficient committed but unutilised credit facilities, as well as available cash to meet its near-term commitments. KEY RATING DRIVERS Good Assets, Granular Portfolio: MIT’s portfolio consists of 84 properties across five industrial property types, with over 14.8 million square feet of net leasable area. It has low industry and tenant concentration, with no single industry accounting for more than 16% of revenue, and the 10 largest tenants contributing to less than 18% of revenue. MIT continues to record positive rental roll-over rates – its portfolio-wide rent per square foot increased to SGD1.84 in the fourth quarter of its financial year ending on 31 March 2015, up 5% from 4QFY14. The quarterly occupancy rate has remained over 90% on average since its IPO in October 2010. Geographic Concentration and Limited Scale: MIT’s rating is constrained because its assets are concentrated within Singapore, and it has limited operating scale compared to higher-rated global property investment companies. Strong Financing Flexibility: MIT has low interest-rate risk and strong financing flexibility – it has FFO fixed charge cover of over 8x. More than 75% of its debt carries fixed interest rates; and its FFO net leverage has remained below 6x and its debt to investment property assets ratio is less than 35%. It has zero encumbrances on its assets, which provides an unencumbered asset cover of more than 2.5x to its unsecured debt. Strong Sponsor: MIT benefits from competitively priced debt funding and strategically located investment properties, by virtue of being sponsored by Mapletree Investments Pte Ltd. KEY ASSUMPTIONS Fitch’s key assumptions within our rating case for the issuer include: – Annual revenue growth in the low single digits – EBITDA margin to remain above 62% – Capex/revenue to average around 10% (FY15: 17%) RATING SENSITIVITIES Positive: No positive rating action is expected in the medium term given MIT’s geographic concentration in Singapore and limited scale in relation to global property investment companies. Negative: Future developments that may, individually or collectively, lead to negative rating action include – Heightened interest rate risk as evidenced by FFO fixed-charge coverage sustained below 5x (FY15: 8.8x) – FFO adjusted net leverage sustained above 6x (FY15: 5.1x) and the ratio of gross debt net of readily available cash to investment property value (LTV) sustained above 40%-45% (FY15: 31%) – Unencumbered assets / unsecured debt below 2x (FY15: 3.0x) – A sustained and material weakening in the competitive position of MIT’s assets, as evidenced in weaker rental renewal rates and occupancy levels, resulting in EBITDA margin sustained below 60% (FY15: 64%)
Medium Term Notes blog update profiles Fitch Ratings giving BOC Aviation’s global medium term a final rating of A-. This update is courtesy of Reuters with an excerpt below.
Fitch Ratings has assigned BOC Aviation Pte Ltd’s (BOC Aviation) SGD145m 3.93% senior unsecured notes due 2025 a final rating of ‘A-‘. The notes are issued under the aircraft leasing company’s USD5bn global medium-term note (GMTN) programme. Proceeds from the senior notes would be used for the company’s general corporate purposes. KEY RATING DRIVERS The notes are rated at the same level as BOC Aviation’s ‘A-‘ Long-Term Issuer Default Rating (IDR). This is because the notes constitute direct, unsubordinated and senior unsecured obligations of the company, and rank equally with all its other unsecured and unsubordinated obligations. The IDR, presently on a Stable Outlook, reflects Fitch’s view of a very high probability of extraordinary support to BOC Aviation from its ultimate parent, Bank of China Limited (BOC; A/Stable). RATING SENSITIVITIES Any perceived changes in BOC’s propensity and ability to provide support would impact BOC Aviation’s IDR and hence the issue rating. For more details on BOC Aviation’s ratings and credit profile, see “Fitch Affirms Aircraft Lessors Following Peer Review”, dated 11 August 2014, and BOC Aviation’s rating report, dated 23 October 2014, available at www.fitchratings.com.
Medium Term Notes blog update is courtesy of Reuters. Fitch Ratings has rated EPIC BPI-Groupe a AA rating and given them a stable outlook. The EPIC BPI-Groupe is the holding company for the French State’s participation in OSEO Group’s operating company OSEO S.A. and is fully-owned by the state. An excerpt from Reuters is below.
Fitch Ratings has affirmed EPIC BPI-Groupe (EPIC) Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘AA’ with a Stable Outlook, and its Short-term foreign currency IDR at ‘F1+’. Fitch has also affirmed Bpifrance Financement’s EUR4bn certificate of deposit programme, EUR20bn euro medium term notes programme and EUR4bn negotiable medium-term notes at Long-term ‘AA’ and Short-term ‘F1+’. The bonds issued under these programmes benefit from an unconditional and irrevocable first-call guarantee from EPIC BPI-Groupe. Fitch rates the holding company EPIC, but not BPI-Groupe SA or its subsidiaries (including Bpifrance Financement) represented by Bpifrance Group. Fitch rates EPIC on a top-down basis under its public-sector entity rating criteria, due to EPIC’s status as a public agency, its tight control by the French State (AA/Stable/F1+) and to a lesser extent, its strategic importance for the government. As a result, the ratings of EPIC are equalised with those of, and credit-linked to, France. KEY RATING DRIVERS EPIC would benefit from very strong state support in case of need. Although the French government has no legal obligation to prevent a default, Fitch assumes that it is highly motivated to provide support on a long- or short-term basis and that it has the legal and financial means to enable EPIC to meet its debt service obligations on time. By virtue of its status, EPIC’s assets and liabilities cannot be liquidated or transferred to entities other than the French State. EPIC is 100% owned by the French government and its missions are carried out through BPI-Groupe SA and its subsidiaries that make up Bpifrance Group. Bpifrance Group is subject to a strong administrative, legal and financial oversight by the French State which defines its missions. As part of public policy, Bpifrance Group’s commitments are monitored by parliament through annual performance reports. Bpifrance Group is a strategic tool for French economic policy through co-lending (with commercial banks) for small and medium-sized enterprises (SMEs) and mid-caps. Its public missions have been reinforced with export financing and by a framework-agreement with Agence Francaise de Developpement (AFD; AA/Stable/F1+) to foster the international development of French SMEs. Underpinned by the absence of high fixed costs as it has no significant branch network, Bpifrance Group continues to post a sound cost/income ratio on its different activities. Under its 2014-2017 strategic plan, Bpifrance Group expects to continue to post sound budgetary performance, with a low cost of risk and a positive operating income of EUR502m at end-2017 (2014: EUR389m). Bpifrance Group benefits from diversified sources of funding, through EPIC’s debt financing division subsidiary (Bpifrance Financement), allowing it to limit its refinancing risk. Since 2015, its funding is also underpinned by the eligibility of Bpifrance Financement’s securities for the public sector purchase programme of the European Central Bank. Bpifrance Financement has a solid and safe liquidity profile, with a confirmed amount of liquidity reserves of EUR9.6bn at end-2014, representing one year of business activity. This translates into a solid liquidity coverage ratio (LCR) under Basel III regulations (600% at end-2014). The breakdown of exposures by product and by sector is diversified in terms of both exposure and number of counterparties. Bpifrance Group has a strict policy on large exposures, thereby limiting high individual exposure and favouring portfolio diversification. RATING SENSITIVITIES EPIC’s ratings are credit linked to the sovereign. A positive or negative rating action on the sovereign would result in a similar rating action on the issuer. Changes to EPIC’s legal status that weaken potential support from the state could also lead to a downgrade. A movement in the ratings of EPIC would affect the ratings of guaranteed bonds issued by Bpifrance Financement.
Medium Term Notes blog update courtesy of Reuters. Fitch Rating service has released released ratings for BOC Aviation Pte Ltd’s receives additional Fitch Ratings, following last week’s GMTN Fitch Ratings.
Fitch Ratings has assigned BOC Aviation Pte Ltd’s proposed five-year US dollar senior unsecured notes due in 2020, an expected rating of ‘A-(EXP)’. The notes will be issued under the aircraft leasing company’s USD5bn global medium-term note (GMTN) programme. The final rating is subject to the receipt of final documentation conforming to information already received. Proceeds from the senior notes would be used for the company’s capital expenditure and general corporate purposes. KEY RATING DRIVERS The notes are rated at the same level as BOC Aviation’s ‘A-‘ Long-Term Issuer Default Rating (IDR). This is because the notes will constitute direct, unsubordinated and senior unsecured obligations of the company, and will rank equally with all its other unsecured and unsubordinated obligations. The IDR, presently on a Stable Outlook, reflects Fitch’s view of a very high probability of extraordinary support to BOC Aviation from its ultimate parent, Bank of China Limited (BOC; A/Stable). RATING SENSITIVITIES Any perceived changes in BOC’s propensity and ability to provide extraordinary support to BOC Aviation would impact BOC Aviation’s IDR and hence the issue rating. For more details on BOC Aviation’s ratings and credit profile, see “Fitch Affirms Aircraft Lessors Following Peer Review”, dated 11 August 2014, and BOC Aviation’s rating report, dated 23 October 2014, available at www.fitchratings.com. Contact: Primary Analyst Brendan Sheehy Director +1 212 908 9138 Fitch Ratings, Inc. 33 Whitehall Street New York, NY 10004 Secondary Analyst Jonathan Lee Senior Director +886 2 8175 7601 Committee Chairperson Nathan Flanders Managing Director +1 212 908 0827 Media Relations: Brian Bertsch, New York, Tel: +1 212-908-0549, Email: firstname.lastname@example.org; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: email@example.com. Additional information is available at www.fitchratings.com.