Fitch cuts Singapore Power

Fitch Ratings said it affirmed Singapore Power Ltd.'s long-term foreign- and local-currency issuer default ratings and SP PowerAssets Ltd.'s foreign- and local-currency senior unsecured ratings at A+.

Fitch said it downgraded their short-term foreign-currency issuer default ratings to F1 from F1+.

The outlook is stable.

The company's long-term ratings reflect two notches of implied support from Temasek Holdings Pte Ltd. and the Singapore government, Fitch said.

The downgrades follow a review based on the agency's criteria that says an A+ long-term rating can map to either an F1+ or an F1 short-term rating, the agency said.

But Singapore Power's negative free cash flow and weak funds from operations/debt service ratios for the last three financial years indicate that cash generation is not strong enough to warrant an F1+ short-term rating, Fitch said.

The ratings also reflect stable and predictable cash flow from its regulated assets in Singapore and Australia, the agency said.

The ratings are constrained by a weakened consolidated credit profile following the largely debt-funded acquisition of the former Alinta assets in 2007, Fitch added.

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