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Moody's assigns short-term issuer rating to ADO Properties

Moody's rating agency assigned a first-time, Prime-2 short-term issuer rating to Luxembourg-based residential property company ADO Properties SA, with a stable outlook.

The rating assignment reflects ADO's adequate liquidity and its projected funds from operations of €80 million to €90 million, in addition to the estimated dividend payouts of about €26.0 million over the next two years and limited debt maturities in the next year, among other things.

The rating agency noted a recent increase in ADO's unsecured, undrawn revolving credit facility to €200 million and the setting up of a €500 million commercial paper program backed by the revolver.

Moody's expects the company to gradually raise the level of its unencumbered assets from its current level of about 20%.

The stable outlook reflects the rating agency's expectations that the company will maintain good liquidity and increase its unencumbered assets while maintaining gross debt-to-assets between 40% to 45% and fixed-charge coverage between 3x to 4x. It also expects sustained like-for-like rental growth of about 5% per year, in addition to the occupancy of its portfolio above 95%.

ADO is a 38%-owned entity of Tel Aviv stock exchange-listed property company A.D.O. Group Ltd., doing business mainly in Germany.