Moody's affirms Mapletree

Moody's Investors Service said it affirmed the Baa1 corporate family rating of Mapletree Logistics Trust with a stable outlook following the announcement of the trust's first-quarter results.

Mapletree's first-quarter operation and financial performance was in line with Moody's expectation: the trust recorded an EBITDA margin of 81% and leverage was restored to below 40% due to an expanded portfolio and the trust is on track with respect to its growth plan, with completed acquisitions of about S$479 million of properties, or 47% of the S$1 billion annual target.

However, Mapletree plans to acquire seven assets in Japan and one each in China and Hong Kong for a total purchase consideration of S$519.6 million and to finance the acquisition with debt. Taking this into consideration, the agency estimated that the trust's leverage is likely to be above 50%, which surpasses the 45% leverage target level of the rating.

This affirmation is premised on Moody's expectation that Mapletree will, in the near term, be able to access the capital market to restore the leverage to below 45% due to its well-established position in the domestic markets, its improving operating profile with an expanded and more geographical diverse portfolio and its relationship with its sponsor.

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