Moody's gives HDB top Aaa credit rating - Channel NewsAsia

[takashi]

channelnewsasia.com/news/singapore/2193934.html
(POSTED: 15 Oct 2015 09:45)

The credit rating agency cites the Housing and Development Board's strong fiscal oversight and financial support offered by the Singapore Government.

SINGAPORE: Credit rating agency Moody's assigned its strongest rating to the Housing and Development Board (HDB), citing its close integration with national policies, as well as the strong fiscal oversight and financial support offered to the housing agency by the Singapore Government.

Apart from the Aaa rating for the HDB, which is on par with the rating assigned to the Singapore Government, Moody's also issued a provisional (P)Aaa rating to HDB's S$32 billion Multi-currency Medium Term Note (MTN) programme.

"The ratings reflect HDB's strong and close linkage with the government of Singapore (Aaa, stable) and our view that, if required, liquidity support would be forthcoming from the government," said the credit rating agency in a press release issued on Thursday (Oct 15).

"Given the key policy role that the HDB plays in the provision of housing and its related social objectives, and the close oversight and involvement of the government in its operations, we believe that the rating of HDB should be the same as the government of Singapore.

"HDB's function as a policy arm of the Singapore government and its status as a statutory board created by the government are clear indications of its integration with the government and therefore supports the link in their credit quality."

Moody's noted that the HDB's role extended beyond being just the primary public housing arm of the government of Singapore, but also to promoting the government's social objectives, "including encouraging married people to have children, caring for the elderly, fostering multi-generational households and ensuring social cohesion".

Also contributing to the top-level rating is the fiscal oversight applied by the Government, with control exercised through board members and Chief Executive Officer who are appointed by the Minister for National Development and with the President of Singapore's concurrence, and an audited budget.

DEBTS OFFSET

While HDB's deficits remain high - growing steadily from S$427 million in FY2011/12, or 6.6 per cent of revenues, to S$2 billion in FY2014/15, or 20.4% of revenues - Moody's noted that the deficit are "more than fully covered" by the Government.

"Strong financial support also ensures that HDB meets all of its financial and debt obligations. Most of HDB's activities are unprofitable and the size of its annual and growing losses reflect its social mission of providing affordable public housing," said Moody's.

The size of HDB's deficits are therefore in effect determined each year by the government, based on their decisions of how much and what type of public housing to construct and what level of subsidy to provide to the population.

"Any concerns regarding HDB's level of indebtedness are offset by the government's role in HDB's borrowing strategy, as well as its capacity and willingness to provide liquidity support, if required."

Due to the close links between Government policy and HDB finances, Moody's cautioned that any downgrade of the Singapore government's Aaa rating would result in the downgrade of HDB's rating. Similarly, any change in the institutional arrangements that would weaken the strong linkages with the government could lead to downward pressure on the rating, it added.

 

[lifeafter41]

channelnewsasia.com/news/singapore/2193934.html
(POSTED: 15 Oct 2015 09:45)

The credit rating agency cites the Housing and Development Board's strong fiscal oversight and financial support offered by the Singapore Government.

SINGAPORE: Credit rating agency Moody's assigned its strongest rating to the Housing and Development Board (HDB), citing its close integration with national policies, as well as the strong fiscal oversight and financial support offered to the housing agency by the Singapore Government.

Apart from the Aaa rating for the HDB, which is on par with the rating assigned to the Singapore Government, Moody's also issued a provisional (P)Aaa rating to HDB's S$32 billion Multi-currency Medium Term Note (MTN) programme.

"The ratings reflect HDB's strong and close linkage with the government of Singapore (Aaa, stable) and our view that, if required, liquidity support would be forthcoming from the government," said the credit rating agency in a press release issued on Thursday (Oct 15).

"Given the key policy role that the HDB plays in the provision of housing and its related social objectives, and the close oversight and involvement of the government in its operations, we believe that the rating of HDB should be the same as the government of Singapore.

"HDB's function as a policy arm of the Singapore government and its status as a statutory board created by the government are clear indications of its integration with the government and therefore supports the link in their credit quality."

Moody's noted that the HDB's role extended beyond being just the primary public housing arm of the government of Singapore, but also to promoting the government's social objectives, "including encouraging married people to have children, caring for the elderly, fostering multi-generational households and ensuring social cohesion".

Also contributing to the top-level rating is the fiscal oversight applied by the Government, with control exercised through board members and Chief Executive Officer who are appointed by the Minister for National Development and with the President of Singapore's concurrence, and an audited budget.

DEBTS OFFSET

While HDB's deficits remain high - growing steadily from S$427 million in FY2011/12, or 6.6 per cent of revenues, to S$2 billion in FY2014/15, or 20.4% of revenues - Moody's noted that the deficit are "more than fully covered" by the Government.

"Strong financial support also ensures that HDB meets all of its financial and debt obligations. Most of HDB's activities are unprofitable and the size of its annual and growing losses reflect its social mission of providing affordable public housing," said Moody's.

The size of HDB's deficits are therefore in effect determined each year by the government, based on their decisions of how much and what type of public housing to construct and what level of subsidy to provide to the population.

"Any concerns regarding HDB's level of indebtedness are offset by the government's role in HDB's borrowing strategy, as well as its capacity and willingness to provide liquidity support, if required."

Due to the close links between Government policy and HDB finances, Moody's cautioned that any downgrade of the Singapore government's Aaa rating would result in the downgrade of HDB's rating. Similarly, any change in the institutional arrangements that would weaken the strong linkages with the government could lead to downward pressure on the rating, it added.

I recall not many countries have rating of Aaa. Singapore is one of them. Well done!!

 

[Movingaway]

so its not ownself check ownself

 

[THE_CHANSTER]

All Stautory Boards are financially backed by the Singapore Government. No real surprise here.

Could you really envisage MAS or the CPF Board issuing bonds of 'junk' status?

 

[Papsmearer]

Why WP and other oppo never raise the question of why HDB need to sell their bonds to the marketplace to raise money? Seriously? Where all their surpluses of previous decades go? Stat Board making so much money should never have to raise money in the market. We know its raising money from the public because Moodys is rating it. What happened to the times when they simply borrowed money from the CPF to do their constructions? Isn't that the reason why HDB loans are at 2.6% because CPF rate is at 2.5%. So, you are saying there is no more money at CPF? They cannot borrow anymore from them? This little article raises more questions then answers.

 

[Rogue Trader]

Moody's? ..... Seriously?

http://www.ibtimes.com/moodys-under-doj-investigation-subprime-mortgage-ratings-report-1801838

Moody's Under DOJ Investigation For Subprime Mortgage Ratings - Report

By Dennis Lynch @neato_itsdennis on February 01 2015 6:07 PM EST

Moody’s Investor Service is under investigation by the Justice Department for issuing favorable ratings to securities backed with the risky subprime loans that fueled the 2008 financial collapse. Justice Department officials have met with former Moody’s executives in recent months to gather information on the credit rating firm’s practices leading up the recession that began in December 2007, the Wall Street Journal reported Sunday.

From 2004 to 2007, Moody’s gave securities built on high-risk subprime mortgages favorable ratings, sometimes up to triple-A ratings, prompting thousands of investors to buy what appeared to be safe securities. When homeowners defaulted on those mortgages, the negative return left investors out billions of dollars. The Justice Department has been looking into Moody’s practices since 2010, the Journal said.

It is unclear if the Justice Department will opt to sue Moody’s for fraud like it did Standard & Poor’s Financial Services in 2013 for engaging in similar practices before the subprime mortgage collapse. When the Justice Department sued S&P, it did so, it said, for defrauding investors to get business from investment banks. The Justice Department is wrapping up that lawsuit against S&P and the two will likely reach a settlement that sees S&P pay around $1.37 billion in the coming weeks.

In S&P’s case, top execs at the company admitted their ratings on those securities were wildly inaccurate, but denied the ratings were a conscious effort to defraud investors. The firm also accused the Justice Department of pursuing a case against it because S&P was the only credit rating firm to downgrade the government’s debt credit rating in 2011. Early last year the firm asked the Justice Department to give it internal documents that would explain why Justice sued S&P but not Moody’s, which S&P said did exactly the same thing, Reuters reported. Neither company has issued a statement about the investigation.

 

[Lovedrive]

deserves shit rating lah

 

[frenchbriefs]

Im curious to know how hdb accumulate a 2billion a year deficit despite building hdbs being one of the most profitable activities on earth besides drilling for oil.where all the profit go?into ho jinx and najib joint bank account?

 

[Cerebral]

Im curious to know how hdb accumulate a 2billion a year deficit despite building hdbs being one of the most profitable activities on earth besides drilling for oil.where all the profit go?into ho jinx and najib joint bank account?

HDB is just a fucking front. SLA charges HDB exorbitant rates for the land and hence HDB shows a loss annually. However, its left pocket to right pocket.

It is also very strange why HDB needs to issue bonds suddenly. Is the govt using HDB to borrow money?

 

[eatshitndie]

this is proof that hdb, thus pap, is da best!

 

[winnipegjets]

I recall not many countries have rating of Aaa. Singapore is one of them. Well done!!

The same rating agency that helped brought about the financial meltdown, placed an AAA rating on these junk securities from sub-prime loans, claiming they were as safe as U.S. Treasurys.