S&P assigns BBB- to OUE, notes

S&P said it assigned BBB- ratings to OUE Commercial Real Estate Investment Trust (OUECT) and the senior unsecured notes it guarantees that were issued by OUE CT Treasury Pte. Ltd. The outlook is stable.

“OUECT's exposure to multiple asset classes supports income diversity and resilience. The REIT has a balanced exposure to office (51% of second-quarter 2023 revenue, based on OUECT's proportionate interest in the respective properties), hospitality (32%), and retail (17%). The office exposure underpins income stability, supported by balanced demand-and-supply dynamics. The minimum rent structure embedded in the master lease agreements provided some downside protection for its hospitality assets through the pandemic,” the agency said in a press release.

S&P added, “By our estimates, OUECT's credit metrics should further improve in 2024. During the pandemic, OUECT's hospitality and retail segments were in the throes. Its financial measures came under pressure. This has eased in 2023.

“We estimate a debt-to-EBITDA ratio of 10.6x-11.0x in 2023. That said, the hospitality segment has not fully recovered. International Air Travel Association expects aviation in Asia to make a full recovery by 2024. In 2024 and 2025, we forecast the ratio improving to 9.8x-10.2x. From 2023 to 2025, we estimate EBITDA interest coverage of 2.1x-2.5x.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.