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By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

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2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

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Rating Action:

Moody's affirms Temasek's Aaa ratings

20 Sep 2019

Singapore, September 20, 2019 -- Moody's Investors Service has today affirmed the Aaa long-term issuer rating of Temasek Holdings (Private) Limited ("Temasek"). At the same time Moody's has also affirmed the following ratings of Temasek guaranteed borrowings and programs

- With respect to Temasek Financial (I) Limited, Aaa senior unsecured rating on bonds and (P)Aaa senior unsecured rating on USD20 billion Guaranteed Medium-Term Note Program;

- With respect to Temasek Financial (IV) Private Limited, Aaa senior unsecured rating on bonds and (P)Aaa senior unsecured rating on SGD5 billion Guaranteed Medium-Term Note Program;

- With respect to Temasek Financial (II) Private Limited, P-1 short-term rating on its commercial papers.

The outlook on all ratings is stable.

RATINGS RATIONALE

'Temasek's Aaa rating reflects its strong fundamental credit profile, which is supported by its steady and recurring dividend income as well as its large and increasingly diverse investment portfolio. Furthermore, Temasek's largest investee companies and major dividend contributors have strong investment grade credit profiles,' says Vikas Halan, a Moody's Senior Vice President.

Temasek does not guarantee the financial obligations of its portfolio companies. Moody's only assesses the parent and its investment holding companies and special purpose funding vehicles when assigning the ratings. On this basis, Temasek continues to maintain a net cash position as of March 2019.

'We expect the company to maintain net borrowings to market value of portfolio below 5% and FFO interest coverage above 15x,' says Halan who is Moody's Lead Analyst for Temasek.

Temasek is not viewed as a conglomerate despite its large stakes in several businesses. Hence, the consolidated financial metrics do not have an impact on Temasek's credit ratings. However, when viewed on a consolidated basis, Temasek Group's credit metrics have weakened for the year ended March 2019 with reported funds from operations to net debt declining to 33.7% as against 37.4% a year ago. This was largely driven by decline in earnings of some of the key investee companies, which benefitted from one-time gains on sale of assets in the previous fiscal year ended March 2018.

Also, on taking a bottom up view of the portfolio Moody's notes that the bulk of its investee companies, where rated, enjoy "Aa" or "A" category ratings.

Temasek's own debts are not guaranteed by the Government of Singapore (Aaa stable). Nevertheless it is wholly-owned by the Minister for Finance and it is designated a Fifth Schedule company under the Singapore Constitution. Temasek is not directed by the government but through its sheer exposure to Singapore -- 63% of its portfolio is denominated in Singapore dollars and 26% of the portfolio by underlying assets is in Singapore -- Moody's believes that the interests of both are naturally aligned.

The rating also reflects Temasek's excellent liquidity profile and is supported by a sizeable reserve of cash and liquid securities which we expect to be maintained. This reserve provides strong debt service coverage to mitigate the risk of any volatility in cash flow and asset value. As a government-related issuer, Temasek's ratings also benefit from its 100% ownership by the Government of Singapore through the Minister for Finance, although currently its baseline credit assessment -- the measure of its stand-alone credit quality -- is also aaa.

Environmental, social and governance (ESG) risks for Temasek were assessed as below:

Firstly, Temasek has indirect exposure to environmental risk through its investee companies. However, Temasek's portfolio largely consists of companies that have low exposure to environmental risk. Sustainability of returns is integral to Temasek's investment approach. Moody's estimates that as of 31 March 2019, Temasek's exposure to sectors that have elevated or moderate environmental risk accounts for a small portion of its portfolio and dividend income. Its exposure to energy & resources sector is only at about 3% of the portfolio.

Secondly, despite having a single shareholder, the governance risk for Temasek is largely mitigated because of oversight by a board that consists of 11 independent directors out of a total 13 board of directors and Temasek's track record of maintaining an extremely conservative financial profile.

The outlook is stable reflecting our expectation that Temasek's credit metrics will remain strong and that management will retain its prudent and conservative approach to its investment and funding strategy.

The rating is Aaa and cannot be upgraded.

Temasek has a standalone aaa rating. Should its underlying credit fundamentals deteriorate and the fundamental rating be downgraded, our Joint Default Analysis framework would become relevant to the rating analysis.

Downward rating pressure on the standalone credit rating could emerge if (1) Temasek were to make aggressive investments, resulting in a material deterioration in the credit quality of its investment portfolio; (2) the amount and quality of its cash and near-cash resources were to deteriorate significantly; or (3) there were indications of moral hazard behavior - such as providing funding support for non-performing investee companies or channeling financial resources to its government shareholder - that could have an adverse impact on Temasek's financial position.

The methodologies used in these ratings were Investment Holding Companies and Conglomerates published in July 2018, and Government-Related Issuers published in June 2018. Please see the Rating Methodologies page on www.moodys.com for a copy of these methodologies.

Temasek is an investment company based in Singapore and is 100%-owned by the Minister for Finance, a body corporate under the Singapore Minister for Finance (Incorporation) Act (Chapter 183).

REGULATORY DISCLOSURES

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

For any affected securities or rated entities receiving direct credit support from the primary entity(ies) of this credit rating action, and whose ratings may change as a result of this credit rating action, the associated regulatory disclosures will be those of the guarantor entity. Exceptions to this approach exist for the following disclosures, if applicable to jurisdiction: Ancillary Services, Disclosure to rated entity, Disclosure from rated entity.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Vikas Halan
Senior Vice President
Corporate Finance Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

Laura Acres
MD - Corporate Finance
Corporate Finance Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

No Related Data.
© 2021 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY550,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​
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