Singapore REITs (S-REITs) have, to a large extent, refinanced their maturing debt obligations in 2009 and have benefited from a recent share price recovery, though questions still remain regarding their financial flexibility and refinancing ability, notes Fitch Ratings in a new special report.
In the report, the agency discusses some of the aspects of S-REITs’ structures, highlighting its concerns, and discusses the impact of the financial crisis and the outlook for S-REITs and their ratings as they emerge from the crisis.
S-REITs have been negatively affected by the financial crisis as a limited availability of debt financing and stock price corrections forced them to restrict their previous aggressive asset acquisition programmes and concentrate on survival and tenant retention in a difficult market. S-REITs responded to the changing market dynamics by sourcing bank loans in advance for their refinancing and by reducing their capex and acquisition plans, and development pipelines; some S-REITs have successfully issued equity. These steps are positive, from a ratings standpoint, but do not address other aspects of the debt structure and liquidity profile on which Fitch continues to have concerns. Continue reading
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