CCT – BT

CCT gets Moody’s downgrade

Moody’s Investors Service Tuesday downgraded CapitaCommerical Trust’s (CCT) corporate family rating to Baa2 from Baa1 and the senior unsecured ratings to Baa3 from Baa2. The outlook for both ratings is negative.

‘The downgrade of CCT’s ratings reflects the company’s strained credit metrics, particularly debt to EBITDA leverage and EBITDA/interest coverage which are in excess of 10 times and around 2.5 times respectively. These metrics are anticipated to weaken further to the extent that they would not be consistent with a Baa1-rated Reit,’ said senior analyst Kathleen Lee

‘Furthermore, Moody’s expects it will be difficult for CCT to improve these metrics over the intermediate term, as its operations will likely continue to be impacted by the slowing economy and constrained capital markets, which could be further exacerbated by upcoming new office completions from 2009 onwards,’ Ms Lee added.