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Moody's downgrades Scentre Group's long-term ratings

Moody's Investors Service downgraded the long-term issuer rating of Scentre Group and its subsidiaries to A2 from A1, with a stable outlook.

The ratings agency also confirmed the P-1 short-term issuer rating for Scentre and its units.

Moody's Vice President and Senior Credit Officer Matthew Moore said the downgrade was based on the view that the Australian regional mall landlord's credit metrics are indicative of an A2 rating and noted Scentre's previously announced changes to its financial policy as a factor in the rating action.

Moody's expects that the group's adjusted net debt/EBITDA will be maintained at about 6.6x to 6.8x over the following 12- to 18-month period. Moody's also anticipates that Scentre will register similar earnings growth in 2018, with increased development activity in 2019.

The stable outlook reflects Moody's opinion that the landlord will retain its solid operating performance and maintain credit metrics within the agency's tolerance levels in the 12 to 18 months to follow.