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Coffeeshop Chit Chat - Spore Power Downgraded To Negative </TD><TD id=msgunetc noWrap align=right>
Subscribe </TD></TR></TBODY></TABLE><TABLE class=msgtable cellSpacing=0 cellPadding=0 width="96%"><TBODY><TR><TD class=msg vAlign=top><TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR class=msghead><TD class=msgbfr1 width="1%"> </TD><TD><TABLE cellSpacing=0 cellPadding=0 border=0><TBODY><TR class=msghead><TD class=msgF noWrap align=right width="1%">From: </TD><TD class=msgFname noWrap width="68%">SGNEWSALTE <NOBR></NOBR> </TD><TD class=msgDate noWrap align=right width="30%">7:47 pm </TD></TR><TR class=msghead><TD class=msgT noWrap align=right width="1%" height=20>To: </TD><TD class=msgTname noWrap width="68%">ALL <NOBR></NOBR></TD><TD class=msgNum noWrap align=right> (1 of 2) </TD></TR></TBODY></TABLE></TD></TR><TR><TD class=msgleft width="1%" rowSpan=4> </TD><TD class=wintiny noWrap align=right>4141.1 </TD></TR><TR><TD height=8></TD></TR><TR><TD class=msgtxt>This is the consequence of using debt to finance acquisition. Singapore Power is now heavily debt-laden from its several expensive foreign acquisitions.
http://uk.reuters.com/article/oilRpt/idUKWNA271520081222?sp=true
Fitch downgrades Singapore Power to 'A'; outlook negative
Dec 22 - Fitch Ratings has today downgraded and removed from Rating Watch Negative Singapore Power's (SP) Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'A' from 'A+', its Short-term foreign currency IDR to 'F1' from 'F1+' and senior unsecured notes to 'A' from 'AA-' (AA minus).
At the same time, Fitch has downgraded and removed from Rating Watch Negative SP Power Assets' (SPPA) Long-Term IDRs to 'A' from 'A+', Short-term foreign currency IDR to 'F1' from 'F1+'. The Outlook for both SP and SPPA is Negative.
"SP's financial profile has deteriorated significantly due to the largely debt-funded acquisition of Alinta assets," notes Simon Wong, Director in Fitch's Asia-Pacific energy and utilities team. "Furthermore, the anticipated equity injection as part of the proposed sale of the Alinta assets to SP AusNet, SP's 51% subsidiary, was aborted placing substantial downward pressure on SP's rating.
In the near term, FFO adjusted leverage is expected to remain high, at over 7.0x, while the FFO interest coverage is expected to remain below 2.7x," adds Mr. Wong.
The Negative Outlook reflects uncertainty over SP's ability to de-leverage, while the delays in de-gearing could result in a further one-notch downgrade.
FFO gross interest coverage of less than 2.0x and FFO gross leverage above 7.5x on a sustained basis could lead to a ratings downgrade.
In addition, any reduction in implied support from Temasek Holdings Pte. Ltd (Temasek) or the Singapore government would be negative for the company's credit quality.
In assigning ratings to SP, Fitch applied a bottom-up approach set out in the agency's Parent/Subsidiary rating linkage methodology, resulting in a one-notch uplift to SP's standalone rating.
The strong linkage is supported by: 100% ownership by Temasek; the strategic importance of SP Power Asset (SPPA) to Singapore and the tight monitoring and control by the Singapore electricity and gas industry regulator and the Singapore Electricity Act; and Fitch's belief that the Singapore government is unlikely to dilute its ownership in the short-to -medium term.
The ratings also reflect the stable regulatory regime for SP's electricity and gas transmission and distribution (T&D) business, SPPA's monopoly position as Singapore's electricity and gas T&D company, and the stability of its Australian regulated assets which provide some cash flow diversity.
The resolution of Australia's electricity transmission and gas distribution reviews in 2008 provides substantial revenue certainty for SP AusNet until end-2010.
Although SPPA's standalone rating remains at 'A+', Fitch notes its Long-Term IDRs are constrained by weaker credit quality of SP and its Australian operations.
Fitch notes that SP successfully refinanced the Alinta bridging loan and other maturing obligations totalling some SGD9bn by August 2008 despite the tightening of global credit markets.
Meanwhile, Fitch expects SP to maintain a flexible dividend policy to de-leverage and improve liquidity. In addition, Fitch expects SP to continue to receive support from the Singapore government and strong support from banks and capital markets.
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http://uk.reuters.com/article/oilRpt/idUKWNA271520081222?sp=true
Fitch downgrades Singapore Power to 'A'; outlook negative
Dec 22 - Fitch Ratings has today downgraded and removed from Rating Watch Negative Singapore Power's (SP) Long-term foreign and local currency Issuer Default Ratings (IDRs) to 'A' from 'A+', its Short-term foreign currency IDR to 'F1' from 'F1+' and senior unsecured notes to 'A' from 'AA-' (AA minus).
At the same time, Fitch has downgraded and removed from Rating Watch Negative SP Power Assets' (SPPA) Long-Term IDRs to 'A' from 'A+', Short-term foreign currency IDR to 'F1' from 'F1+'. The Outlook for both SP and SPPA is Negative.
"SP's financial profile has deteriorated significantly due to the largely debt-funded acquisition of Alinta assets," notes Simon Wong, Director in Fitch's Asia-Pacific energy and utilities team. "Furthermore, the anticipated equity injection as part of the proposed sale of the Alinta assets to SP AusNet, SP's 51% subsidiary, was aborted placing substantial downward pressure on SP's rating.
In the near term, FFO adjusted leverage is expected to remain high, at over 7.0x, while the FFO interest coverage is expected to remain below 2.7x," adds Mr. Wong.
The Negative Outlook reflects uncertainty over SP's ability to de-leverage, while the delays in de-gearing could result in a further one-notch downgrade.
FFO gross interest coverage of less than 2.0x and FFO gross leverage above 7.5x on a sustained basis could lead to a ratings downgrade.
In addition, any reduction in implied support from Temasek Holdings Pte. Ltd (Temasek) or the Singapore government would be negative for the company's credit quality.
In assigning ratings to SP, Fitch applied a bottom-up approach set out in the agency's Parent/Subsidiary rating linkage methodology, resulting in a one-notch uplift to SP's standalone rating.
The strong linkage is supported by: 100% ownership by Temasek; the strategic importance of SP Power Asset (SPPA) to Singapore and the tight monitoring and control by the Singapore electricity and gas industry regulator and the Singapore Electricity Act; and Fitch's belief that the Singapore government is unlikely to dilute its ownership in the short-to -medium term.
The ratings also reflect the stable regulatory regime for SP's electricity and gas transmission and distribution (T&D) business, SPPA's monopoly position as Singapore's electricity and gas T&D company, and the stability of its Australian regulated assets which provide some cash flow diversity.
The resolution of Australia's electricity transmission and gas distribution reviews in 2008 provides substantial revenue certainty for SP AusNet until end-2010.
Although SPPA's standalone rating remains at 'A+', Fitch notes its Long-Term IDRs are constrained by weaker credit quality of SP and its Australian operations.
Fitch notes that SP successfully refinanced the Alinta bridging loan and other maturing obligations totalling some SGD9bn by August 2008 despite the tightening of global credit markets.
Meanwhile, Fitch expects SP to maintain a flexible dividend policy to de-leverage and improve liquidity. In addition, Fitch expects SP to continue to receive support from the Singapore government and strong support from banks and capital markets.
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