Moody’s Ratings has revised the outlook for Frasers Hospitality Trust (FHT) to negative whilst affirming its Baa3 issuer rating. This change reflects uncertainties surrounding FHT’s financial policies and capital structure following its privatisation and impending delisting. The move comes after FHT’s unitholders approved a privatisation proposal by Frasers Property Limited (FPL) on 15 August 2025, with a court hearing scheduled for September to finalise the transaction.
The outlook downgrade highlights concerns over FHT’s transition to a privately held entity, which is expected to reduce corporate transparency. Yu Sheng Tay, a Moody’s Ratings Assistant Vice President and Analyst, noted, “The outlook revision to negative reflects the uncertainty around FHT’s future financial policies and capital structure following its privatisation and delisting.”
FHT’s Baa3 rating is supported by its ownership of a high-quality, geographically diverse property portfolio, which benefits from long-term master lease agreements. However, the privatisation will lead to reduced external oversight and visibility into FHT’s financial performance and governance. FPL’s stake in FHT will increase to 63% post-transaction, with TCC Group Investments Limited retaining 37%.
Moody’s expects FHT’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) to moderate to around SGD78 million over the next 12 to 18 months, down from SGD80 million in fiscal 2024. This is attributed to softer demand and increased competition. Despite these challenges, FHT maintains excellent liquidity, with cash reserves of approximately SGD100 million as of June 2025.
The outlook could stabilise if FHT provides greater clarity on its future financial policies and maintains a prudent credit profile. Conversely, more aggressive financial strategies could lead to a downgrade.
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