Fitch assigns BBB to CapitaLand notes

Fitch Ratings said it assigned CapitaLand Ascott Real Estate Investment Trust's planned guaranteed unsecured medium-term notes a BBB long-term rating. The notes will be issued by the trust's 100% subsidiary, Ascott REIT MTN Pte. Ltd., and will be guaranteed by DBS Trustee Ltd. in its capacity as Ascott REIT's trustee.

“The proposed notes are rated at the same level as Ascott REIT's issuer default rating (IDR), as they will form the trust's unsecured obligations and rank pari passu with all its other senior unsecured obligations,” Fitch said in a press release.

The proceeds will be used to repay maturing near-term debt. The trust's secured creditors represent 39% of its debt and do not have recourse to the rest of the capital structure. “Further unpledged assets cover unsecured debt by more than 2.5x and, accordingly, limit the risk of subordination,” Fitch said.

The outlook is stable.

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