S&P turns CPI outlook to negative

S&P said it revised its outlook for CPI Property Group SA to negative from stable and affirmed the BBB- ratings on the company and its senior unsecured debt and BB rating on its subordinated debt.

“Challenging market conditions and high refinancing costs continue to pressure CPI's EBITDA-interest-coverage and debt-to-debt-plus-equity ratios, and we expect limited rating headroom over the coming 12-18 months. We note that CPI's reported net loan-to-value (LTV) ratio stood at 50.6% in its third-quarter update, down 30 basis points from year-end 2022 but slightly up from 49.9% in first-half 2023,” S&P said in a press release.

The agency explained there is a one-in-three chance of a downgrade in the next 12-18 months if its liquidity becomes inadequate or its debt to debt plus equity tops 60% and EBITDA interest coverage falls to 1.8x.

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