S&P assigns Aedas B+, notes BB-

S&P said it assigned a preliminary B+ rating to Aedas Homes SA and preliminary BB- and 2 recovery ratings to its planned €315 million senior secured bond.

“Our assessment of Aedas' business is constrained by the inherent volatility and cyclicality of the real estate developer industry. We believe property development is closely tied to economic cycles and is an industry in which competition can be intense. This has translated into a high degree of variability in historical sales levels and property values in the industry, which we factor in our assessment of Aedas. We estimate Aedas’ EBITDA margin will be about 20% in the next 12 months,” S&P said in a press release.

The outlook is stable. “The stable outlook reflects our view that the company´s revenue should remain supported by the high level of pre-sales and sustained demand for newly built residential units in the outskirt areas of Spain’s main metropolitan areas, despite Covid-19 effects on macroeconomic conditions and the Spanish housing market,” the agency said.

The agency said it forecasts Aedas will maintain S&P Global Ratings adjusted debt to EBITDA at about 3x over the next 12 months, with EBITDA interest coverage above 5x.

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