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CapitaLand Commercial Trust Downgraded To 'BBB+' On Increasing Leverage Following Portfolio Enhancement; Outlook Stable

BackSep 22, 2017
Announcement Title General Announcement
Date & Time of Broadcast Sep 22, 2017 22:25
Status Replace
Announcement Sub Title CCT downgraded to 'BBB+' on increasing leverage following portfolio enhancement; Outlook Stable
Announcement Reference SG170922OTHRIWW5
Submitted By (Co./ Ind. Name) Toh Su Jin Jason
Designation Company Secretary, CapitaLand Commercial Trust Management Limited
Description (Please provide a detailed description of the event in the box below) S&P Global Ratings has lowered its long-term corporate credit rating on CapitaLand Commercial Trust to 'BBB+' from 'A-' with a Stable Outlook.

S&P's downgrade is based on the likelihood that CCT's leverage will increase over the next 24 months primarily due to debt funding for Asia Square Tower 2 (AST2). As a result, CCT's ratio of funds from operations (FFO) to debt and ratio of debt to total assets will deteriorate. It is to be noted, however, that S&P believes that the acquisition will improve CCT's portfolio quality over the next 3-4 years. The agency also believes that the commercial office market has bottomed out and will progressively improve from 2018 onwards. Given that CCT has demonstrated a consistent record of high occupancies and stable rentals throughout property cycles, S&P believes that AST2 together with CCT's other high quality and well-located assets are well positioned to benefit from improving market fundamentals.

Please see attached press release by S&P Global Ratings.

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