Moody’s lowers Yuexiu REIT, notes to Baa3

Moody's Investors Service said it downgraded Yuexiu Real Estate Investment Trust’s (Yuexiu REIT) issuer rating to Baa3 from Baa2.

The agency also downgraded the senior unsecured rating on the medium-term note program of Yuexiu REIT MTN Co. Ltd. to provisional Baa3 from provisional Baa2 and the senior unsecured ratings on the notes issued under the program to Baa3 from Baa2.

The outlook is stable. This concludes the review initiated on Dec. 19.

"The rating downgrade reflects Moody's expectation that Yuexiu REIT will show only slow improvements to its elevated debt leverage position over the next 12 to 18 months. The high leverage – resulting from the debt-funded acquisition of Yuexiu Tower – no longer supports the trust's previous Baa2 issuer rating," Moody's vice president and senior credit officer Franco Leung said in a news release.

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