Moody’s changes Mapletree Commercial view to negative

Moody’s Investors Service said it changed the outlook to negative from stable and affirmed the Baa1 issuer rating of Mapletree Commercial Trust.

Moody’s also affirmed the Baa1 ratings on the senior unsecured notes drawn down from the medium-term program under Mapletree and Mapletree Commercial Trust Treasury Company Pte. Ltd. Mapletree Commercial Trust guarantees the notes.

“The change in outlook to negative reflects our expectation that MCT’s credit metrics could weaken as the heightened social distancing measures and weaker consumer sentiment will curb retail spending at VivoCity and could sustainably increase vacancy and lower rental income,” said Junling Tan, a Moody’s analyst, in a press release.

“Furthermore, MCT’s cash flows could be adversely impacted by Singapore’s legislation that allows tenants to defer rent payments for an initial six months[1]. The outlook for demand for office space has also weakened given the recession in the global economy and also as the work from home threatens to become the new normal for many companies,” added Tan.

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