Fitch Ratings downgraded Global Logistic Properties Ltd.'s ratings to BBB from BBB+ and removed the logistics facility provider's ratings from rating watch negative.
The ratings affected include GLP's long-term foreign-currency issuer default rating, its senior unsecured rating and the rating on its US$2 billion euro medium-term note program, among others. The ratings outlook for the company's IDR is stable.
In handing down the downgrade, Fitch said the action takes into account its expectation for the holding company's leverage to see a steep rise to more than 70% after the company drew down additional loans in January.
GLP's leverage rose from less than 25% at the end of March 2017, after it took on debt to provide financing to its new shareholders to fund its recently completed privatization.
According to Fitch, the leverage will gradually drop, but it may take more than 24 months for GLP to deleverage below 50%. The successful execution of a deleveraging plan by GLP within the next 24 months may not be within the company's control, Fitch stated.
The rating agency added that GLP's business profile is superior to its logistic property owner/operator peers with BBB and BBB+ ratings, but its financial profile is weaker than those of its global peers rated BBB+ and is comparable to its peers rated at BBB.
Fitch expects GLP to keep benefiting from its large scale and extensive global network, which place the company strongly as online shopping becomes increasingly popular.
