Moody’s lifts Grand City view to positive

Moody’s Investors Service said it changed the outlook Grand City Properties SA to positive from stable.

The agency also said affirmed the company’s Baa2 long-term issuer rating, along with the Baa2 ratings of the company’s senior unsecured notes due April 2025 and convertible notes due March 2022, as well as the Ba1 rating of its two junior subordinated notes.

The outlook revision also reflects the company’s more moderate external growth compared to previous years and the resulting incipient stabilization of its key operating metrics as evidenced by sharply reduced – though still elevated – vacancies, the agency said.

The positive outlook also reflects the company’s improving leverage and management’s commitment to maintain it at lower levels than previously anticipated, Moody’s said.

The ratings reflect the company’s focus on stable residential activities and the ensuing granularity of its tenant base, geographic diversification of its property portfolio and its new strategic focus away from acquisitions of turnaround portfolios, which results in an increasing track record of improving vacancies, the agency said.

These positives are partly offset by the moderate quality of the company’s assets and still limited track record of stabilized revenues and cash flow generation, Moody’s said.

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