Fitch rates CapitaLand Trust's proposed unsecured notes of SGD200 mn 'BBB-'

Real estate company expects to use proceeds for repaying debt, general working capital and other business activities

Fitch Ratings has assigned CapitaLand India Trust's (CLINT) proposed unsecured five-year notes of up to 200 million Singapore dollars (SGD) a 'BBB-' long-term rating. The notes will be issued by CapitaLand India Trust Management, the trustee manager of the Singapore-listed real estate company, under its SGD 1.5 billion multi-currency debt issuance programme.

 

The credit rating agency said that the notes are rated at the same level as CLINT's long-term Issuer Default Rating (IDR) because they constitute “direct, unconditional, unsecured, and unsubordinated” obligations of the issuer.

 

The trust has minimal secured debt in its capital structure, which limits subordination risk to unsecured creditors, said the agency.

 

CLINT will use the notes' proceeds to finance its business, including repaying debt and general working capital.

 

The negative outlook on CLINT's 'BBB-' long-term IDR reflects an increase in the trust's capex amid strong demand for data centres, which could see earnings before interest, taxes, depreciation, and amortisation net leverage remaining above 8.0 times over a prolonged period (2024: 8.6 times).

 

The trust is considering several options to reduce leverage to within the rating threshold in 2025, but the timing is subject to market conditions, said Fitch.

 

According to it, CLINT had adequate liquidity and capital access, with cash of SGD 135 million and SGD 105 million of committed undrawn credit facilities as of end-2024, against debt maturities of SGD 513 million in 2025, of which SGD 284 million were short-term revolver. The trust is in the process of refinancing its debt maturities.

 

CLINT in December 2024 had an asset base of SGD 3.7 billion , comprising real estate used primarily as business space in India.

 

The trust has 10 information technology business parks, one logistics park, and three industrial facilities, with a total completed floor area of 21.9 million square feet, spread across Bangalore, Chennai, Hyderabad, Pune and Mumbai. It is developing four more data centres.