Moody's lowered its long-term issuer rating on Finland's Citycon Oyj to Baa2 from Baa1, with a negative outlook.
The rating agency said the downgrade also applies to the senior unsecured bond ratings of the shopping center-focused property company's Citycon Treasury BV unit.
Moody's said the action takes into account the fact that the company's effective leverage has been above 40% for three years running, citing Citycon's slower-than-anticipated sales and large investments in extensions and redevelopments of some of its shopping centers.
The rating agency expects Citycon's leverage to remain around 45% to 44% over the next 12 to 18 months.
The negative outlook reflects Moody's views that the recent negative trend in like-for-like rental growth in the sector, as well as falling footfall and tenant sales in Finland and Norway, may continue to put pressure on the value of the company's assets.
