S&P Global Ratings affirmed Mercialys' issuer credit rating at BBB/A-2 and revised its outlook on the French retail-focused real estate investment trust to negative from stable.
The rating agency noted the REIT's reported asset portfolio devaluation of 1.3% in the year ending June 30 due to increased capitalization rates and added that its view of the credit quality of Mercialys' largest tenant, Casino Guichard-Perrachon SA, has strongly deteriorated. Mercialys' exposure to Casino is at about 27%, which Ratings views as high and could render the landlord more vulnerable within its current business risk profile.
The negative outlook reflects the likelihood that Ratings could downgrade Mercialys in the next 24 months if its operational performance is weaker than expected or if any additional concentration risk arises due to the company's exposure to Casino.
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.
