(Alliance News) - Moody's Investors Service on Friday affirmed the P-1 short-term issuer and commercial paper ratings of Land Securities Group PLC and assigned a first-time negative outlook to the ratings.
Moody's said the Prime-1 short-term rating reflects the credit strengths LandSec, alongside its large and well-diversified property portfolio with limited tenant concentration risk.
"Land Securities's rating is further supported by its strong liquidity, which includes the company's steady cash flow from long-term lease contracts with a diversified tenant base. Land Securities is subject to a whole business securitisation, which includes a protective liquidity regime and tiered covenants that reduce the probability of default, providing the security group with additional credit strength," Moody's said.
However, the ratings agency said the negative outlook was based on the impact of the coronavirus pandemic on the company's retail and leisure exposure, and the risk of weaker long term demand for office space if remote becomes more widespread and entrenched, even after the pandemic subsides.
Moody's also pointed to execution risk as the property company embarks on a GBP4 billion capital recycling programme over the next few years and exits its exposure to subscale sectors that represent around 11% of assets.
The stock closed up 1.9% at 725.60 pence Friday.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
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