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S&P cuts GLP, GLP China
S&P said it downgraded its ratings for GLP Pte. Ltd. and GLP China Holdings Ltd. to BBB- from BBB but affirmed the BBB- senior unsecured ratings.
“We lowered the issuer credit ratings because the likelihood that GLP will reduce the proportion of nonrecurring EBITDA to below 30% of adjusted EBITDA by 2022 is low. GLP continues to pursue an aggressive operating strategy, which lengthens its asset monetization cycle, resulting in continued high proportion of volatile cash flows and earnings. This longer-than-expected volatility is beyond the tolerance limit set for the previous BBB rating,” S&P said in a press release.
The agency forecasts GLP's proportion of nonrecurring EBITDA to peak at 64%-68% of adjusted EBITDA in 2021, up from 52% in 2020, before declining 50%-55% in 2022 and 30%-35% in 2023. “We had previously expected the proportion to peak in 2020 and trend down to 30% by 2022,” S&P said.
The outlook is stable.
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