Property group in rating review
The exposure of Goodman Group to European-based managed funds, along with falling property valuations, has prompted research house Moody’s Investor Services to reconsider the property group’s ratings.
Moody’s has told the market it is reviewing its ratings on the property group’s issuer and senior unsecured ratings for possible downgrade, while the rating in Goodman’s hybrid securities is also being reviewed for possible downgrade.
A statement from Moody’s said Goodman’s look-through gearing, which incorporates debt in its managed funds, had deteriorated since the end of December last year. The researcher said this was “mainly because of higher stakes in … some of the European-based managed funds”, coupled with falling property valuations.
The researcher said while it “acknowledges Goodman’s track record of managing its capital structure”, it believes its ability to lower its look-though gearing in the near term will be constrained by the challenges facing many property groups: falling asset valuations and difficulty in selling assets and raising capital.
Goodman currently has a ‘Baa1’ issuer and senior unsecured rating and ‘Baa2’ rating on its hybrid securities.
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