Moody's downgrades Yuexiu REIT

Moody's Investors Service said it downgraded Yuexiu Real Estate Investment Trust to Ba1 from Baa3 and lowered to (P) Ba1 from (P) Baa3 the backed senior unsecured rating on Yuexiu REIT MTN Co. Ltd.'s backed medium-term note program, and to Ba1 from Baa3 the backed senior unsecured rating on the backed MTNs sold under the MTN program.

Moody's said it also changed all rating outlooks to stable from ratings under review. These actions conclude the review for downgrade started on March 13.

"The rating downgrade reflects our expectation that Yuexiu REIT's credit metrics over the next two years will no longer support its previous Baa3 rating, driven by its high debt leverage and exposure to increased borrowing costs," said Alfred Hui, a Moody's analyst, in a press release.

"The stable outlook reflects our expectation that Yuexiu REIT's operations and credit metrics will gradually improve from a low base in 2022, and it will maintain good access to funding to address refinancing needs at reasonable costs," Hui added.

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