What is meant by Baa3?

Rating Scale

Soilbuild Business Space REIT has recently issued SGD100 million 3.60% fixed rate notes due 2021. Moody’s has given the notes a definitive rating of Baa3.

Honestly, when I saw the “Baa3” rating, I did not understand what it means. I thought it must be something good. It is very common for REITS to issue notes for refinancing when its debt is due and often I see crediting rating agencies such as Moody’s give a rating for the notes issued.

After some research, I found the below scale used by Moody’s on its website. It is known as Global Long Term Rating Scale.

Credit Rating Description
Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B Obligations rated B are considered speculative and are subject to high credit risk.
Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.

Note: Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of hybrid securities issued by banks, insurers, finance companies, and securities firms.*

OUE Hospitality Trust Rights Issue Over Subscribed

OUE Hospitality Trust Logo

On 6th April 2016, OUE Hospitality Trust announced that the rights issue was 139.9% subscribed.

I have taken up the rights and should see the stapled securities being added to my Central Depository by Wednesday, 13th April 2016.

Mr. Christopher Williams, Chairman of the REIT Manager, said: “We would like to thank stapled securityholders for their tremendous support of OUE H-Trust’s rights issue. The acquisition of CPEX will allow OUE H-Trust to further benefit from Changi Airport’s growth in the coming years as Terminal 4 is expected to be completed in 2017 and Jewel Changi Airport is expected to open in 2019.”

Number of Rights Stapled Securities % of Rights Issue
Valid acceptances 419,862,598 95.0%
Excess applications 198,232,740 44.9%
Total 618,095,338 139.9%

 

The Path to Financial Freedom

Ice Berg

How do you define your success? Is it getting a promotion at your job or having enough passive income to declare you are working for leisure only? Regardless of which, there are many underlying hard work that most people do not see.

For us, the financial bloggers, there is a lot of underlying hard work and dedication to achieve our own determined success. We have to spend lots of time reading and analyzing annual reports of companies, catching up with financial news and sharing our research on our blogs with readers.

To sustain readership, we have to maintain a good habit of blogging consistently. We also have to make sure what we publish is as accurate as possible. How many of us can withstand the journey?

There can be disappointments whereby sometimes the price of your stock recommendation fell by 10 percent the next day.

Financial bloggers also sacrifice our personal time to write and share our stock analysis with readers. Most of us do not get paid to do this.

There can be failures. I seen a financial blogger who vanish from the internet space after he blogged about selling his 4 room HDB and using all the money to invest in stocks.

It takes a lot of persistence to come this way far. For me, I define success as the day where I never have to work and live off passive income.

How do you define your success?