MI-REIT – BT

Moody’s downgrades MI-Reit

Moody’s Investors Service on Thursday downgraded Macarthurcook Industrial Reit’s (MI-Reit’s) corporate family rating from Ba2 to B1.

The rating continues to be on review for possible downgrade, Moody’s said.

‘The ratings downgrade reflects MI-REIT’s heightened liquidity pressure as the refinancing of its S$201 million loan maturing in April 2009 remains unresolved,’ Moody’s vice-president and senior analyst Kathleen Lee said.

The trust had announced on Nov 26, 2008, that it expects to finalise negotiations on refinancing its debt maturities by the end of January 2009, though Moody’s notes that the trust is still negotiating with its incumbent lenders.

‘However, the terms and conditions – as well as the timeframe to complete the negotiation – are still uncertain for the time being,’ Ms Lee added.

The downgrade also reflects the fact that in addition to the debt maturities due in April, MI-REIT has unfunded financing needs of S$91 million to complete a put and call option over 4A International Business Park by fourth quarter 2009. ‘This presents an additional funding challenge facing the trust under the prevailing weak credit environment,’ the ratings agency noted.