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Moody’s Affirms PSA Ratings, Outlook Stable

Rating agency Moody’s has affirmed Aa1 ratings for Singapore-based port operator PSA International and PSA Corporation Limited’s Aa1 issuer rating.

Additionally, the company’s outlook on all ratings is stable.

The Aa1 ratings reflect PSA International’s baseline credit assessment (BCA) of a3 and the very high level of support that Moody’s believes the company’s parent Temasek Holdings will provide in the event that extraordinary financial support would be required.

“PSAI’s underlying credit strengths, as reflected by its BCA, are mainly underpinned by its portfolio diversity and strong global market positions; its dominant position – via PSAC – in the Port of Singapore; as well as a track record of strong profitability and resilience to economic down-cycles,” Ray Tay, a Moody’s Vice President and Senior Credit Officer, said.

“Although there are risks to throughput resulting from continued global trade tensions, PSAI and PSAC have both maintained their credit quality through past trade cycles, and we expect them to maintain resilience through the current volatility in trade.”

Furthermore, PSA Corporation’s Aa1 rating reflects the company’s standalone credit assessment of a2 and uplift based on Moody’s assessment of the likelihood of a very high level of support that PSAC will receive from the Singapore Government through its parent, PSAI, in a hypothetical worst case scenario.

PSAC derives considerable credit strength from its position as the dominant operator in the Port of Singapore, as well as its track record of strong profitability and resilience through past economic down-cycles, Moody’s explained.

Singapore’s container port is the second-busiest globally in terms of throughput, and is strategically located on important trade routes to and from key export countries. The port is therefore an important transhipment hub for Asia.

The stable outlooks reflect Moody’s expectation that PSAI’s and PSAC’s underlying businesses and financial profiles will remain steady amid current global trade headwinds and further assume the absence of any material changes to their ownership.