Grand City Properties S.A., / Key word(s): Research Update/Real Estate
GRAND CITY PROPERTIES S.A.
Standard & Poor's Ratings Services raised Grand City Properties S.A. rating to 'BB+' based on stronger capital structure; Outlook Stable
Standard & Poor's Ratings Services ('S&P') raised Grand City Properties S.A. (the 'Company') rating from 'BB' to 'BB+' on its long-term corporate credit rating and on the Company's bonds, due in 2020.
S&P provides a stable outlook reflecting their opinion that the Company's steady tenant demand in its main locations should continue to support rental income growth resulting in steady recurring cash flow. Additionally, S&P highlight in their research update the significant portfolio growth GCP has made and the improvement of the assets and tenant diversity.
The rating upgrade is the result of S&P's revised assessment of GCP's improved financial risk profile. Due to the increased equity base, S&P believes that the credit metrics will improve in the coming years. Additionally, S&P's notes the Company's well-capitalized capital structure with an equity ratio of about 50%, a reported loan-to-value (LTV) ratio below 50% and an increased unencumbered asset base to more than 30%.
S&P emphasizes the significant headroom under the debt covenants and projects an increase in occupancy in the assets, which should increase rental values and therefore the headroom under the covenants.
The Standard & Poor's Ratings Services Research Update on Grand City Properties S.A. is available on the Company's website:
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