By ANGELA TAN

 

SINGAPORE - Standard & Poor's Ratings Services (S&P's) revised the rating outlook on Singapore Post Ltd (SingPost) to negative from stable.

 

At the same time, S&P's affirmed its 'AA-' long-term corporate credit rating and 'axAAA' Asean regional scale rating on SingPost.

It also assigned its 'AA-' issue rating and 'axAAA' Asean regional scale rating to the company's proposed issue of Singapore dollar (S$) 200 million (US$143 million) fixed rate notes due 2020.

'We revised the outlook to negative to reflect SingPost's weaker credit protection metrics for the next two years and uncertainty over the outcome of the company's M&A activities,' said S&P's credit analyst Andrew Wong.

'The affirmed ratings reflect the company's very strong market position in its core domestic and international mail business, high operating efficiency, and solid cash flow measures.'

S&P's believes SingPost has an excellent business risk profile. The company maintains a very strong market position in the domestic and international mail business in Singapore, despite the opening-up of the basic domestic and international letter and postcard business to competition in April 2007. It has a significant share of the domestic delivery mail market, which contributed about 65 per cent to total revenues and 65 per cent to total operating profit for the nine months ended Dec 31, 2009.

S&P's expects SingPost to maintain the last-mile access of its distribution network.

It said SingPost's financial risk profile is modest and underpinned by solid cash flow measures. The company's leverage will increase with the proposed notes issuance.

S&P's expects the global economic recovery to have a positive impact on demand for mail services.

'SingPost has geographical concentration and somewhat limited growth opportunities in its main postal services business. This may lead to aggressive initiatives to enhance shareholders' returns, such as entry into more competitive and lower-margin business segments including hybrid mail and logistics. We believe that such initiatives may result in the company taking longer than expected to repair its credit metrics,' said Mr Wong.

In line with the industry trend, S&P's expects operating cost pressures to continue, especially because of Singapore's reclassification as a 'New Target Country' by the Universal Postal Union that will increase net terminal dues payments for international mailing.

By ANGELA TAN

 

SINGAPORE - Singapore Post Limited (SingPost) said on Tuesday that it is proposing to issue up to $200 million (US$143 million) worth of fixed rate notes due 2020.

 

DBS Bank Ltd and UBS AG, Singapore Branch have been appointed as the joint lead managers for the proposed notes issue.

The notes will be issued in the denomination of $250,000 and will have a tenor of 10 years from their date of issue.

SingPost expects to use the net proceeds to finance new investments as part of its growth strategy as well as for capital expenditure and working capital requirements.

http://www.sgx.com/wps/portal/marketplace/mp-en/listed_companies_info/corporate_actio

check this link, should give dividents in Nov!