Moody's assigns definite Ba1 rating to OUE Commercial REIT

Rating outlook is stable.

Moody's Investors Service has assigned a definitive corporate family rating of Ba1 to OUE Commercial Real Estate Investment Trust (OUE C-REIT) following the trust's successful listing on the Singapore Exchange Securities Trading Limited. This removes the provisional status assigned on 10 January 2014. The rating outlook is stable.

For its rating rationale, Moody's said that the sale of assets to OUE C-REIT, the drawdown of the term loan facility and receipt of subscriptions for Units have occurred such that OUE C-REIT starts with a total debt of approximately SGD682 million (RMB loans are converted based on the exchange rate of SGD1: RMB4.783).

"OUE C-REIT's Ba1 rating takes into account the favourable industry dynamics underpinned by its portfolio of high-quality and strategically located assets in Singapore and China," says Jacintha Poh, a Moody's Analyst.

"However, OUE C-REIT's small asset size, relative to its rated peers, limited operating track record and high concentration risk constrains its rating," adds Poh, who is also Moody's lead analyst for OUE C-REIT.

At listing date, OUE C-REIT has no near-term refinancing risk. Nonetheless, its debt profile is lumpy and concentrated, with almost 59% of its debt to mature in 2017.

We expect the trust to pro-actively spread out and lengthen its debt maturity profile over the next 12 months.

Moody's detailed rating rationale was set out in a press release and new issuer report issued on 10 January 2014.

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