Eagle Hospitality Trust has rejected reports that its sponsor is in default on the lease of The Queen Mary cruise liner in California and that the ship is falling into disrepair.

The historic liner "remains safe and structurally sound", said the trust in a filing to the Singapore Exchange last night.

This clarification comes after the trust requested a trading halt yesterday morning.

Earlier this month, media reports had said the trust's sponsor, Urban Commons, could be in danger of defaulting on its lease agreements to run The Queen Mary, which has been converted into an upscale hotel as one of Eagle's key assets.

The United States city of Long Beach near Los Angeles had sent a letter to Urban Commons chief executive Taylor Woods, claiming that the company had failed in its lease obligations to make several repairs to the ship, according to the Long Beach Post newspaper.

The Oct 1 letter also asked Urban Commons to respond within 30 days and provide a plan to address the deficiencies in the repairs or the city may find the company in default.

The trust said yesterday that Urban Commons is preparing a response to the city with updates on maintenance issues.

It added that Urban Commons is fully committed to its partnership with the city of Long Beach in "preserving and enhancing The Queen Mary as a first-class, all-inclusive entertainment destination".