S&P Global Ratings affirmed Merlin Properties' long-term rating at BBB, with a positive outlook.
The affirmation is driven by the Spanish real estate investment trust's robust performance in the first quarter, compared to the past quarters, and stronger liquidity. The company's recurring funds from operations for the period ended March 31 grew 12.5% year over year to €79.0 million from €70.2 million.
The rating agency believes the REIT may improve its debt-to-debt-plus-equity ratio further toward 40% in the next 12 months and maintain its EBITDA interest cover above 3x over the period while sustaining EBITDA margin and decreasing existing vacancy rates.
The positive outlook reflects Ratings' expectation that in the next 12 months, the company will continue to generate steady rental and EBITDA growth on the back of good market conditions in Spain.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.