There are a few things to consider.. the business model for a bond rating agency is quite different from a stock broker that provides stock research.

Rating agencies generate revenue primarily through these two means:
1. Companies that issue bonds have to pay the rating agency an annual fee to assign and maintain a rating on the bonds that are outstanding.
2. Bond investors who wish to buy the bonds and have access to the rating reports produced by these rating agencies have to pay an annual subscription fee to access their database.

In short, they charge companies who want a rating on their bonds, and they charge investors who want access to the rating reports and access to the analyst who provided that rating (Institutional investors can call up the analyst who rates the bonds to ask them anything).

In the case of ESR, they stopped paying Moody's for a solicited rating (Moody's is the most expensive rating agency of the big 3). By right, Moody's could have opted to withdraw the rating immediately since they are not getting paid by ESR to maintain the rating. However, Moody's could have maintained an unsolicited rating on ESR at the request of bond investors who are their subscribers. If you're a big enough client, these rating agencies will bend over backwards to accommodate you.

So in this case, ESR said that due to there being only SGD 50 million of outstanding bonds left, it could be that a particularly large investor is no longer holding their bonds and Moody's has zero obligation to maintain a rating on ESR. From Moody's perspective, since ESR is not paying them anymore, there is no problem for them to downgrade the rating further even if ESR is in trouble. So the withdrawal of rating is likely to be due to 'legitimate business reasons', or that the analyst could be re-assigned to rate another company that pays for a rating.

This is purely hypothetical, but it is one of the possible scenarios to explain this situation.

This post has been edited by Havoc Knightmare: Jun 19 2020, 02:00 PM

These REITs would only seek for a rating if doing so will result in a lower coupon rate (and therefore interest cost). Maintaining a rating can be expensive business since the fees are a % of the outstanding bonds rated (which can run into the hundreds of thousands or millions of dollars), which would otherwise go into your DPU.

If their bond investor base are local investors who are familiar with the REIT's business and assets, then they are likely able to get away with doing a non-rated bond issuance. After all, REITs are one of the easier businesses to understand and monitor. Usually getting a Moody's or S&P rating will make more sense if they want to issue USD bonds to international investors who are less familiar with the companies. So long there is a base of domestic bond investors who are willing to buy their bonds without a rating (as with many other Singaporean companies) and at a comparable coupon level, then a rating is not necessary. But yes, they can always get a rating in future if there is a need to do so.

As for my blog.. I stopped writing because the amount of readers was too low. Doesn't seem like there are enough folks like yourself who appreciate all the effort that went in since it can take days to write a single post.

It's just a matter of time before hunt for yield begins among the laege institutional investors again because bond yields are next to nothing now.. the REITs that show more resilience will benefit the most.

Its important to not over analyze day to day moves. Liquidity is quite thin for this REIT despite its size.. it doesn't take a big buyer or seller to move the stock significantly.