Moody's downgrades ST Engg's baseline credit assessment but affirms its triple A issuer rating

Singapore

MOODY'S Investors Service has downgraded ST Engineering's baseline credit assessment (BCA) to a3 from a2 based on an expected deterioration of the company's financials following its acquisition of Belgium-based satellite company Newtec Group.

Nonetheless, the credit rating agency has affirmed the company's triple A issuer rating, which takes into account the a3 baseline credit assessment rating and expectation of "very strong" support from the Singapore government through its wholly owned investment company, Temasek Holdings. The expectation was based on ST Engineering's importance to Singapore as "a strategic contractor and supplier of defence equipment, as well as an employer of highly skilled labour".