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GPT Group Downgraded To ‘A-‘ On Limited Prospects For Asset Recycling; Outlook Stable: S&P

November 2, 2023 – Rating agency S&P has downgraded GPT Group to “A-” due to debt-funded acquisitions and rising interest rates.

“The credit measures of GPT Group have been below expectations for the ‘A’ rating in the past two years, primarily due to debt-funded acquisitions and rising interest rates,” S&P said in a statement. A challenging commercial real estate market will likely limit the ability of the Australia-based diversified property group to divest assets and restore key credit measures in a timely manner, it said.

S&P expects the ratio of funds from operations (FFO) to debt to stay below 12% over the next 12-24 months. “We lowered to ‘A-‘ from ‘A’ our long-term issuer credit rating on GPT and the issue rating on the group’s guaranteed debt. At the same time, we lowered our short-term issuer credit rating on GPT to ‘A-2’ from ‘A-1’,” it said. The stable outlook on the long-term rating reflects our expectation that GPT’s credit metrics will remain comfortably within tolerances for the ‘A-‘ rating, it added.