Singapore Horizon Towers case back in High Court

Singapore Horizon Towers case back in High Court 
 
THE seemingly never-ending saga of the Horizon Towers collective sale is clearly losing steam.
Two of the nine sets of minority owners fighting the sale have dropped out of the High Court appeal that started yesterday, and even the number of onlookers in the public gallery was noticeably fewer than at previous hearings.

The dropouts - a couple representing themselves and a foreign firm - were not represented in court yesterday.

Minority owners Jasmine Tan and Rudy Darmawan are representing themselves and three others while Mr Quek Keng Seng is representing himself. The other minority owners are represented by Harry Elias Partnership.

Senior Counsel Harry Elias told the court that the $500 million sale price was not obtained in good faith. He highlighted the fact that a higher offer of $510 million from Vineyard Holdings in Hong Kong was not communicated to the owners.

Mr K. Shanmugam and his team from Allen & Gledhill, who are representing the buyers, applied successfully to participate in the court session.

Minority owners are appealing a decision in December last year by the Strata Titles Board (STB) to approve the $500 million sale of the 99-year leasehold Leonie Hill estate.

The on-off again sale has reflected the roller-coaster ride Singapore’s property market has been on over the past two years or so.

The Horizon Towers deal was inked in January last year, before the market shot up. Hotel Properties, Morgan Stanley Real Estate and Qatar Investment Authority agreed to pay $500 million.

But as the market boiled over last year, minority owners felt they were getting a raw deal and tried to halt the sale. They had some success when the STB rejected the sale on a technicality, but that ruling was overturned by the High Court in October. The STB approved the sale in December.

But the once-hot market has cooled considerably since then. Sale volumes have thinned out dramatically although prices have generally held up.

The minority owners are still fighting the sale as they never wanted to sell from Day One. And the sale price of less than $900 per sq ft is still below prevailing market rates, said an industry source.

The hearing before Justice Choo Han Teck continues today.

Source : Straits Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

Singapore West Coast condo plot draws whopping 12 bids

Singapore West Coast condo plot draws whopping 12 bids 

HK-linked firm puts in top tender of $305 psf for site in attractive location

By Joyce Teo, Property Correspondent 
 
COMPETITION was brisk for a 99-year leasehold condominium site in West Coast Crescent, with 12 firms defying signs of a property slowdown to lodge bids.
The bidders included major and mid-sized developers and contractors, with a Hong Kong-linked firm emerging with the highest tender - but only just. Billion Rise, which is linked to the Cheung Kong group, bid $110.44 million for the site - $305 per sq ft (psf) of gross floor area - to pip its nearest rival by 1 per cent.

Tian Hock Properties, which has Far East Organization chief executive Philip Ng as a shareholder, tendered $108.9 million or $301 psf. MCL Land was next with $103.5 million or $286 psf.

The response was strong, in contrast to the weak property market sentiment. One sign of that came on Tuesday when the Government decided not to award a leasehold landed plot in Westwood Avenue in Jurong West as the bids were too low.

Consultants pointed to differences between the two sites. They said the West Coast Crescent site’s prime location had sparked the keen interest.

It suits a mass market condo project, which would be able to better weather any sector weakness, said Knight Frank director Nicholas Mak.
The Jurong West landed plot was in a less favourable spot and would have accommodated 99-year leasehold landed homes, which typically do not sell as well, he added.

The West Coast Crescent site can be built up to about 36 storeys. Some high-floor units would enjoy good views of the ocean and West Coast Park as surrounding buildings are mostly low- to medium-rise, he said.

This tender also reflects the current market situation as some bids came in relatively low. Industry sources say a few developers were trying their luck with opportunistic bids.

The lowest bid of $50 million, from Teambuild Construction’s Scantech Development, works out to just $138 psf.

Other bidders included Sim Lian Land ($236 psf), Hoi Hup Realty ($235 psf), Frasers Centrepoint ($210 psf) and Allgreen Properties ($186 psf). City Developments’ Sunny Vista Developments and TID also put in a bid of $180 psf.

Consultants said the top bid of $305 psf will translate into an estimated break-even price of $680 psf to $720 psf for new condos. Units could be sold at between $750 and $800 psf.

Units at nearby Blue Horizon were sold at about $750 psf in the resale market in January and February, while sub-sales of units in Varsity Park and Clementi Woods were done at $680 psf to $750 psf, according to CBRE Research.
Source : Straits Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

Allco Reit feared downgrade would hurt financing deal - Singapore

Allco Reit feared downgrade would hurt financing deal  - Singapore

Reit took legal action against Moody’s revision to protect $620m debt funding

By Selina Lum 
 
FRESH details have emerged over why a Singapore-listed property trust took unprecedented legal action to try to avoid a credit downgrade by global ratings agency Moody’s.
Allco Commercial Real Estate Investment Trust (Reit) felt a $620 million bank refinancing deal could be jeopardised by a downgrade, according to court documents obtained by The Straits Times.

In an affidavit, Allco Singapore chief executive Nicholas McGrath said he was shocked to hear of the planned downgrade as he had been assured by Moody’s that its panel would not decide on Allco’s rating until today.

‘I also informed Moody’s that it was crucial that there was no revision of Allco Reit’s rating before the requisite credit approvals from its bankers were obtained for the refinancing of its debts worth $620 million.’

But Mr Peter Choy, a vice-president and senior credit officer at Moody’s Investors Service, said in an affidavit that the agency had made no such assurances.

He said: ‘If there was ever any suggestion that Moody’s customers could control or influence its ratings, the market would no longer trust the ratings that it gives.’

NO SUCH AGREEMENT
‘If there was ever any suggestion that Moody’s customers could control or influence its ratings, the market would no longer trust the ratings that it gives.’
MR CHOY of Moody’s Investors Service, saying in an affidavit that the firm had not assured Allco Reit that it would not decide on its rating until today
 
Last week, Allco obtained a High Court order to stop Moody’s Singapore from announcing its decision to downgrade Allco Reit’s rating.

The injunction even prevented Moody’s from holding any meeting or discussion to review Allco’s credit rating.

The injunction was lifted on Tuesday after Moody’s lawyers presented arguments to Justice Choo Han Teck.

Hours later, Moody’s informed subscribers that it was reducing the rating of Allco Reit by one notch, from Ba1 to Ba2, with more downgrades possible.

These ratings gauge a company’s credit standing. A Ba-rated company is judged to have speculative elements and be subject to substantial credit risk, according to Moody’s definitions.

Allco’s moves come against the backdrop of a global credit crunch that has made it harder for organisations to get funding.

A check of court papers disclosed that as early as Tuesday last week, Moody’s ratings panel had decided to drop Allco’s credit rating by two notches, from Ba1 to Ba3. This followed a previous downgrade on Jan 31.

Even as Allco appealed to Moody’s against the downgrade, it went to court to stop the agency from reviewing its ratings before today. On Wednesday last week, Allco, represented by Senior Counsel Alvin Yeo, obtained the injunction.

Moody’s, represented by Senior Counsel K. Shanmugam, then applied to lift the injunction.

Mr Shanmugam described Allco’s legal moves as an abuse of process. Allco, he argued, was simply seeking to buy more time to conclude its refinancing negotiations with the banks.

He said the injunction prevented Moody’s from doing its job of keeping the market properly informed of its current views of the issuer’s credit standing.

When contacted yesterday, Mr McGrath declined comment.

Source : Straits Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

Material home - Singapore

Material home - Singapore

Gwen Tan’s apartment is an experiment with basic and relatively cheap materials, ARTHUR SIM discovers
WHILE most architects get to design beautiful houses for their clients, home for themselves is usually a cookie-cutter apartment in one of the numerous, almost identical condominiums or block of flats that form our uniform skyline.
 
Material choices: Plywood floor and a raked screed feature wall (above) and a custom-made dining table and bamboo mural (next)
Resisting conformity, architect Gwen Tan of Formwerkz Architects, decided to go against the grain, quite literally, and clad her apartment in Sengkang with cheap plywood.

And as it turned out, the plywood was the least invasive (read destructive) of the changes she made together with her pliant husband, Berlin. ‘Our four-bedroom apartment became a two-bedroom one, much to the dismay of our parents,’ says Ms Tan.

The basis for the reconfiguration of her home has everything to do with the things (and people) she loves. And as she loves to cook and entertain family and friends, her home became a large ‘fluid space’ that can accommodate big groups of people.

Much of the re-allocation of space went into making the dining area bigger. The custom-designed dining table, for instance, sits between four and 12 people comfortably.

Sacrificing a bedroom to make a larger living area also allowed Ms Tan to accommodate another passion of hers: plants. ‘Homes, being very personal spaces, should reflect and support one’s lifestyle and interests,’ she says.

This passion for plants also dictates the way the home looks. There is a deliberate choice of materials used here that is typically associated with the outdoors like the raked screed surface to create a feature wall, the rusty steel beams that become furniture, and of course, the use of plywood.

For the living room, Ms Tan explored the textures of plywood by sanding down the top layer to reveal a surprisingly decorative grain of timber that has an almost ‘collage’ effect.

‘For my home, I wanted very much to experiment with a simple palette of very basic and relatively cheap materials,’ adds Ms Tan.

It often goes unappreciated that architects like Gwen Tan take it upon themselves to ‘experiment’ on themselves just so their clients’ homes are prefect.

While it is unlikely that Ms Tan will ever be satisfied with her designs, she says she has come close to designing her ideal house.

The house is one of Formwerkz’s most recent commissions and happens to belong to banker, William Ng. The spaces in the house, like Ms Tan’s own home, are similarly very personal.

The design of the house is distinguished by very clearly delineated private and public spaces, which are then punctuated by idiosyncratic elements like the timber box shed - ‘a grown-up’s tree house’ - and a slightly bizarre reading cubicle that is part furniture and part window.

The ground floor has walls that fold away completely so the garden and the living areas can become one. But to add a sense of intrigue, the walls are staggered where possible so that pocket spaces are created and there always seems to be something to discover around the corner.

This way of programming the design brief entirely around the client’s passion - which essentially consists of two pianos, two aquariums, and a lot of plants - results in a sculpted form that is perhaps more erratic than your average home. But as the designer explains it, ‘it is a way of bringing the narrative of the design to the facade’, or in other words, giving some identity to your home.

Architects simply would not live any other way.
Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

Cheung Kong pips Far East in URA tender - Singapore

Cheung Kong pips Far East in URA tender - Singapore

It offers $305psf ppr for West Coast condo plot next to Blue Horizon
By KALPANA RASHIWALA

(SINGAPORE) Cheung Kong Holdings-linked Billion Rise yesterday pipped Far East Organization to emerge as top bidder for a 99-year leasehold condo site facing West Coast Park and overlooking the sea.
 
 
Billion Rise’s bid of $110.44 million or $305 per square foot per plot ratio (psf ppr) was just 1.4 per cent higher than the next highest offer of $301 psf ppr by Far East unit Tian Hock Properties.

The tender for the choice plot, next to Blue Horizon condo developed by Far East, attracted 12 bids. City Developments and TID, Allgreen Properties, Frasers Centrepoint, MCL Land, Sim Lian, a Kheng Leong unit and Hoi Hup Realty were among the other bidders. Entities linked to Alpha Investment Partners and Teambuild Construction also took part in the tender.

Yesterday’s outcome was in a sharp contrast to that at a state tender last week for a landed housing plot at Jurong West when there were just two bids - both way below market expectations. The Housing & Development Board, which conducted that tender, decided not to award the site.

On offer at yesterday’s tender, conducted by Urban Redevelopment Authority, was a more appealing site near the sea and a short drive from the VivoCity shopping and entertainment complex.

‘The plot attracted an overwhelming response of 12 bids from major and mid-size developers and contractors,’ said CB Richard Ellis executive director Li Hiaw Ho. ‘It signals developers’ confidence in the suburban segment despite the current lukewarm response to new projects.’

Notwithstanding the wide participation in yesterday’s tender, the top bid of $305 psf ppr was towards the lower end of the $260-400 psf ppr range of bids indicated by property consultants when the site was launched in January.

Industry sources suggested that Cheung Kong’s breakeven cost for the condo could be about $600-630 psf. ‘It is likely that units in the proposed development will be sold at an average price of around $750-800 psf,’ said Knight Frank director Nicholas Mak.

Units at Blue Horizon next door were transacted at an average price of $740 psf in Q4 last year.

Market watchers had expected Cheung Kong, controlled by Hong Kong tycoon Li Ka-shing, to be awarded the latest site. The last time that a company in Mr Li’s stable was awarded a 99-year condo site in a state tender here was 11 years ago in early 1997, when Japura Pte Ltd placed the top bid of $456.51 psf ppr for a site in Bayshore Road, which it later developed into the Costa Del Sol condo that boasted sweeping views of Singapore’s eastern shoreline.

Costa Del Sol is in front of The Bayshore condo, which was developed by Far East. This time, the heavyweights took the competition to the West Coast.
Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

Horizon minorities say sale done in bad faith - Singapore

Horizon minorities say sale done in bad faith - Singapore

By MICHELLE QUAH

The minority owners of Horizon Towers say the collective sale of the development was conducted in bad faith because the sales committee did not seek the best price.
This was the case they put forward yesterday on the opening day of their appeal against a decision by the Strata Title Board (STB) on Dec 7 last year to approve the en bloc sale of Horizon Towers.

Some of their arguments were already presented at the STB hearings but the minority owners felt the need to bring them up again as they believe they did not get a fair hearing when the sale was adjudicated by STB last year.

The group of minority owners, represented by Harry Elias Partnership, dwelt heavily yesterday on their claim that the Horizon Towers sales committee deliberately ignored an offer from a Hong Kong developer that was higher than the $500 million offered, and eventually paid, by Hotel Properties Ltd and its partners.

The minorities say an offer of $510 million came from Vineyard Holdings (HK) via Malaysian law firm Shan & Su, and that the sales committee deliberately hid this information from the other owners.

The minorities also claim the sales committee set onerous conditions for this competing offer and misrepresented at the STB hearing that its lawyer had advised it to dismiss the offer.
 
The minorities also introduced fresh evidence they say contradicts testimony to STB last year by sales committee member Henry Lim. Mr Lim said he was advised by the sales committee’s law firm, Drew & Napier, not to pursue the Vineyard Holdings offer.

But Harry Elias Partnership produced a letter from Drew & Napier in which the law firm said it advised Mr Lim to follow up all potential offers - and left the responsibility of doing so entirely to him. ‘At no time was Drew & Napier asked to do anything in relation to Vineyard’s interest,’ the firm’s letter said.

The letter was obtained only in January this year, after STB made its decision on the collective sale of Horizon Towers.

The minorities are arguing that STB therefore based its decision on false and misleading evidence, as it relied on the testimony of Mr Lim to conclude that the sales committee did not act improperly in not pursuing the Vineyard offer.

The hearing of the minorities’ appeal continues today. Hotel Properties’ law firm Allen & Gledhill, which was granted leave yesterday to intervene in the appeal, will present its arguments. The majority owners who agreed to the collective sale, represented by Tan Rajah & Cheah, will also put their arguments.

Two minority owners - Lo Pui Sang, who represented himself, and Canterford, who was represented by Senior Counsel Michael Hwang and Dr SK Phang - decided not to appeal against STB’s decision. Minority owner Jasmine Tan, previously represented by Tan Kok Quan, has opted to represent herself in the appeal.

Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

Roxy-Pacific profit soars on good show by property, hotels - Singapore

Roxy-Pacific profit soars on good show by property, hotels - Singapore
NEWLY listed Roxy-Pacific Holdings, a Singapore specialty property and hospitality group, has posted a strong set of maiden results.
 
St Patrick’s Loft: One of the projects which contributed to higher revenue from property development 
Group net profit surged to $19.3 million for the full year ended Dec 31, 2007, from $4.84 million the previous year as revenue more than doubled to $102.7 million from $48.8 million.

Earnings per share increased to 3.79 cents from 1.02 cents. The increase in revenue was driven by strong performances by both the key segments of property development and hotel ownership and property investment.

Revenue from property development rose to $64.2 million from $18.0 million as a result of the progressive recognition of revenue from the sales of seven development projects: The Nclave, The Treeline, The Montage, St Patrick’s Loft, Axis@Siglap, The Marque@Irrawaddy and The Medley.

Higher selling prices of the group’s property units resulted in improved gross profit margin of 21 per cent, up from 10 per cent.

The group’s gross profit margin for its hotel ownership and property investment segment also increased.

Said Teo Hong Lim, executive chairman and CEO of Roxy-Pacific: ‘In 2007, the strong property market and robust tourism industry augured well for us and we remain optimistic about the Singapore property market in 2008, in particular, prospects for the mid-tier and mass market segments which is the focus of all our existing projects.’

‘We intend to launch eight residential projects comprising about 290 units for FY2008 and expect these together with current ongoing projects to contribute positively to our performance for FY2008.’

The group announced a final cash dividend of one cent per share, which translates to a dividend yield of about 4 per cent.
Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

MacarthurCook Reit to fight any hostile bid - Singapore

MacarthurCook Reit to fight any hostile bid - Singapore

Trust now keen on buying two Asian properties, not 10

THE manager of Singapore-listed MacarthurCook Industrial Reit, a subject of takeover speculation, said yesterday that it will fight any hostile bid to acquire the trust.
‘I can guarantee you that it will be contested. We certainly won’t let somebody just walk in the door and take over management,’ Craig Dunstan, managing director of Australia’s MacarthurCook Ltd, told Reuters in an interview.

He said the Australian property manager now controls 13.2 per cent of MacarthurCook Industrial, raising its stake from an initial 2.3 per cent when the trust was listed last April.

Singapore’s real estate investment trust (Reit) sector is expected to consolidate in the short term, and brokerages such as Goldman Sachs have cited MacarthurCook Industrial as a potential takeover target due to its diffuse shareholding structure.

The absence of a large controlling shareholder makes it easier for predators to buy a majority stake.

MacarthurCook Industrial’s share price fell 2.9 per cent yesterday, while the broader Singapore market was flat.

MacarthurCook Industrial and other Singapore Reits controlled by Australian firms have suffered the most in the current weak market due to concerns over their ability to raise debt or equity.

Allco Commercial Reit, which is planning to sell its Australia properties as embattled manager Allco Finance Group struggles to repay its debts, fell 8.1 per cent after Moody’s downgraded its credit rating further on Tuesday.

Mr Dunstan said MacarthurCook Industrial, which owns about $620 million worth of factories and warehouses, mainly in Singapore, will not meet its annual asset growth target of $500 million for the fiscal year to end-March 2009.

‘We’re not going to raise equity in today’s market at today’s prices, because that’s not the right thing to do for our current investors,’ he said.

MacarthurCook Industrial currently trades at around a 24 per cent discount to its net asset value of $1.30 a share.

The property trust dropped a $200 million equity fundraising exercise in January citing poor market conditions, and is now looking to buy two properties in Asia instead of the 10 it was considering initially, Mr Dunstan said.

‘Our responsibility is to generate good risk-adjusted returns for our current investors. They will continue to get a good return whether we buy another asset in the next 12 months or not,’ said Mr Dunstan, a former lawyer who founded MacarthurCook in 2002. — Reuters

Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

1st Software plans $175m acquisition of property firm - Singapore

1st Software plans $175m acquisition of property firm - Singapore

It will issue new shares to acquire Teambuild in reverse takeover deal
By WINSTON CHAI

IN a bid to retain its listing status, 1st Software is acquiring a construction and property development firm for $175 million in a reverse takeover deal.
1st Software entered into an agreement with Teambuild Corporation yesterday to acquire it through the issue of about 10.94 billion new 1st Software shares at 1.6 cents each, which will give the vendors of Teambuild an approximately 85 per cent stake in 1st Software’s enlarged capital.

Teambuild, which has offices in Singapore and Malaysia, is a privately-held company specialising in property development and building construction.

The firm’s current business is made up of a mix of public and private residential developments, as well as institutional and upgrading projects.

Another reason for the proposed acquisition is that it will allow the company to participate in the business of property development and building construction based primarily in Singapore with a strong growth potential, said 1st Software.

Under the deal, Teambuild provided a post-tax profit guarantee of at least $8 million for FY2007 and $20 million for FY2008.

For its 2007 financial year, Teambuild may declare dividends out of its reserves of not more than $10 million. If Teambuild fails to meet its profit targets, the vendors will have to pay 1st Software for the shortfall.

The acquisition is subject to regulatory and shareholder approval. It is also contingent on other prevailing conditions including the ability to secure a $2 million loan to finance the buyout. An application has also been made for waiver from a general offer. Shares of 1st Software have been suspended since Dec 26, 2006, following the sale of its core digital publishing business earlier in the year.

In a bid to find a new venture to maintain its listing, the company had tried to acquire Hong Kong commodities trading firm Psons Ltd through a $67.95 million reverse takeover deal in November 2007 but the transaction eventually fell through.

Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com
 

One pleaded damage, the other argued integrity - Singapore

One pleaded damage, the other argued integrity - Singapore

Inside peek at the arguments that raged between Allco Reit, Moody’s
By MICHELLE QUAH
(SINGAPORE) Allco Commercial Real Estate Investment Trust (Allco Reit) fought hard against a credit ratings downgrade by Moody’s Investors Service because it believed the downgrade would cause it ‘irreparable damage’.
But Moody’s stuck to its guns as it felt its very integrity - as well as that of the market - was at stake.

Both sides presented impassioned arguments - till now unknown to the public - before the High Court earlier this month. The battle raged in chambers, away from the eyes of the media and members of the public.

The Business Times managed to get an inside look into the case, by inspecting documents filed with the High Court.

The case had made headlines yesterday when it became known that Allco Reit had taken legal action to prevent Moody’s from downgrading its credit ratings. Little else was known about the suit other than the fact that Allco Reit’s action failed, and Moody’s went ahead with the downgrade.

The documents point to a spirited tussle. Nicholas McGrath, CEO of Allco Reit, said in his affidavit that he had earlier this year impressed upon Moody’s vice-president and senior credit officer Peter Choy that it was ‘crucial that there was no revision of Allco Reit’s rating before requisite credit approvals from bankers are obtained for the refinancing of debt worth S$620 million (on March 20, 2008)’.
 
Mr McGrath, represented by Senior Counsel Alvin Yeo of Wong Partnership, said he was assured by Mr Choy that Moody’s ratings panel would not meet before March 20.

Allco Reit subsequently announced through the Singapore Exchange (SGX) on March 9 that it was considering selling its Australian assets - properties valued at A$483 million (S$617 million) - in the wake of an Australian media report.

Mr McGrath said he had informed Moody’s that the sale was not confirmed, but that Moody’s ratings panel had still felt the need to meet to discuss Allco Reit’s SGX announcement. It was at this meeting that the panel decided to downgrade Allco Reit’s rating, on the basis that it was selling its Australian assets.

Mr McGrath said it was ‘puzzling’ that Moody’s would downgrade Allco Reit’s rating on the basis that it was merely considering the sale of such assets, adding that the agency’s ‘precipitous and wholly unwarranted conduct is baseless’.

He said the trust then felt compelled to obtain a court injunction to stop the ratings downgrade, as such a revision would result in ’serious and irreparable prejudice and damage to Allco Reit’.

Moody’s, represented by Senior Counsel K Shanmugam of Allen & Gledhill, responded to Allco Reit’s claims and sought to set aside the injunction. The agency argued that it cannot - and should not - ever be prevented from issuing its current views on credit ratings, as that was the very basis of its existence.

Mr Choy, in his affidavit, said that Moody’s customers must accept the ratings agency’s independence and the fact that they cannot control or influence its ratings.

He said that Mr McGrath’s assertion that Moody’s had agreed to suspend its review of Allco Reit until March 20 has ‘no basis whatsoever’ - as such a decision by Moody’s would effectively undermine the value of the ratings it issues.

He added that the injunction which Allco Reit sought, to prevent Moody’s from downgrading the trust’s rating, prevented the public from accurately judging Moody’s assessment of Allco Reit’s credit worthiness.

He referred to the regulatory requirement that all Reits registered with the Monetary Authority of Singapore must have a rating from one of three agencies - Moody’s, Standard & Poor’s or Fitch Ratings - and for that rating to be disclosed to the public.

Moody’s pushed for the injunction to be lifted, on the basis that its very integrity was at stake.

Justice Choo Han Teck lifted the injunction on Tuesday morning, but didn’t specify his grounds for doing so. Allco Reit had intended to appeal the decision but later withdrew its appeal when Moody’s went ahead and issued its downgrade of the Reit.

The agency lowered the trust’s corporate family rating to ‘Ba2′ from ‘Ba1′ - and retained the ratings on review for further possible downgrade.

Source : Business Times  - 20 March 2008

Singapore Property - Buy , Sell , Rent , Invest

Mindy Yong

(+65)91002985

mindy@mindyyong.com