Singapore, February 05, 2021 -- Moody's Investors Service has assigned Prime-1 (P-1)
foreign and local currency short-term debt ratings to Singapore-based
Bayfront Infrastructure Management Pte. Ltd.'s (Bayfront)
USD500 million guaranteed euro-commercial paper programme (CP programme).
The P-1 ratings are based on the full, unconditional and
irrevocable guarantee (Guarantee) provided by the Government of Singapore
(Guarantor, Aaa stable).
RATINGS RATIONALE
The ratings of the CP programme are based on the Aaa credit strength of
Singapore. In Moody's opinion, the terms and conditions of
the Guarantee are sufficient for credit substitution.
The Guarantee covers Bayfront's overall debt repayments of up to
USD1.8 billion for the principal on a revolving basis and USD200
million for interest payments. For the CP Programme, the
Guarantee will also cover Bayfront's repayments of up to USD500
million for principal and USD50 million for interest payments.
The terms of the Guarantee are consistent with Moody's core principles
for guarantees for credit substitution, which were identified in
a methodology called "Rating Transactions Based on the Credit Substitution
Approach: Letter of Credit-backed, Insured and Guaranteed
Debts", published in May 2017. These core principles
as they relate to Bayfront's CP programme are :
1. The Guarantee is unconditional and irrevocable, and covers
the full amount of the CP Programme.
2. The Guarantee covers any amounts avoided or clawed back as a
result of insolvency, bankruptcy or similar proceedings brought
against Bayfront.
3. The terms of the Guarantee extends for as long as the terms
of the CP programme.
4. The Guarantee is enforceable against the Guarantor in Singapore
courts.
The Guarantee differs from what Moody's considers as ideal legal feature
for credit substitution in relation to the timeliness of payment.
Legally, the Guarantee grants the government a period of 15 days
to repay creditors after payments are due. However, in practice,
there are sufficiently strong incentives for the government to pay without
delay in the event that the guarantee is triggered. Bayfront's
indirect government ownership and the fact that the Guarantor is the government,
rather than a third-party commercial entity offering a product
for a fee, all establish a linkage with the government's own obligation
and interest to make timely payment.
OUTLOOK
Short-term ratings do not carry outlooks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
There is no possibility of a rating upgrade because the P-1 short
term ratings of the CP programme are the highest possible under Moody's
short-term rating scale.
Bayfront's guaranteed short-term debt ratings are linked
to the ratings of the Singapore government. Only a multi-notch
downgrade of the sovereign's rating would lead to a downgrade of the CP
programme ratings.
The principal methodology used in these ratings was Rating Transactions
Based on the Credit Substitution Approach: Letter of Credit-backed,
Insured and Guaranteed Debts published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154.
Alternatively, please see the Rating Methodologies page on www.moodys.com
for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity
analysis, see the sections Methodology Assumptions and Sensitivity
to Assumptions in the disclosure form. Moody's Rating Symbols and
Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
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.
The ratings have been disclosed to the rated entity or its designated
agent(s) and issued with no amendment resulting from that disclosure.
These ratings are solicited. Please refer to Moody's Policy for
Designating and Assigning Unsolicited Credit Ratings available on its
website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit
rating and, if applicable, the related rating outlook or rating
review.
Moody's general principles for assessing environmental, social and
governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the EU and is endorsed by
Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main
60322, Germany, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
Further information on the EU endorsement status and on the Moody's office
that issued the credit rating is available on www.moodys.com.
The Global Scale Credit Rating on this Credit Rating Announcement was
issued by one of Moody's affiliates outside the UK and is endorsed by
Moody's Investors Service Limited, One Canada Square, Canary
Wharf, London E14 5FA under the law applicable to credit rating
agencies in the UK. Further information on the UK endorsement status
and on the Moody's office that issued the credit rating is available on
www.moodys.com.
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.
Eugene Tarzimanov
VP - Senior Credit Officer
Financial Institutions 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
Graeme Knowd
MD - Banking
Financial Institutions 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
