Research Update: Australian Prime Property Fund Retail 'A-' Rating Affirmed On Commitment To Deleveraging; Outlook Remains Negative

The ongoing effects of the COVID-19 pandemic, together with funding requirements associated with unitholder redemption requests, are pressuring Australian Prime Property Fund Retail (APPF Retail)'s credit quality. Accordingly, we expect APPF Retail to prioritize debt reduction in the next 12-18 months, supported by asset sales; deferral of shareholder redemption payments; proceeds from internally generated cash flow; restricting distributions; and new equity raisings. As a result, we believe the fund's adjusted FFO to total debt should recover to above 17% from fiscal 2022, in line with expectations for the 'A-' rating. On Nov. 18, 2020, S&P Global Ratings affirmed its 'A-' long-term issuer credit rating and 'A-2' short-term issuer credit rating on APPF Retail. The negative outlook reflects continued pressure on

...- The ongoing effects of the COVID-19 pandemic, together with funding requirements associated with unitholder redemption requests, are pressuring Australian Prime Property Fund Retail (APPF Retail)'s credit quality. Accordingly, we expect APPF Retail to prioritize debt reduction in the next 12-18 months, supported by asset sales; deferral of shareholder redemption payments; proceeds from internally generated cash flow; restricting distributions; and new equity raisings. - As a result, we believe the fund's adjusted FFO to total debt should recover to above 17% from fiscal 2022, in line with expectations for the 'A-' rating. - On Nov. 18, 2020, S&P Global Ratings affirmed its 'A-' long-term issuer credit rating and 'A-2' short-term issuer credit rating on APPF Retail. - The negative outlook reflects continued pressure on the fund's credit metrics from curtailed operations stemming from the pandemic. Consequently, APPF Retail's key credit measures could remain below tolerances for the 'A-'...

Research Update