On 22 October 2019 Fitch Ratings Ltd. (“Fitch”) has assigned IGD a long-term issuer default rating of “BBB-” with a stable outlook; the opinion of the rating agency reflects a stable rental income profile, that benefits from high occupancy rates and leverage metrics that improved over the past four years. In its credit opinion, Fitch also highlighted the good location of IGD’s shopping malls, the effective merchandising mix with well-known domestic and international quality tenants and a balanced combination of hypermarkets, small and medium retailers, services and food courts.
On 8 April 2020, Fitch confirmed the “BBB-“ rating to IGD, but, following the global epidemiological emergency from COVID-19, the Agency placed its rating in a Negative Rating Watch condition. This condition reflects the risk of a negative impact on IGD’s rental income caused by the extended coronavirus containment measures in Italy (closure of non-essential retail shops), as many tenants may face liquidity issues.
On 1st October 2020 Fitch Ratings Ltd. confirmed the BBB- investment grade rating with negative outlook removing it from Rating Watch Negative: “The rating assigned reflects the rent collection rates which were higher than what Fitch estimated at the beginning of April, together with the commercial strategy adopted that favors rents deferrals instead of rent discounts and waivers, providing improved visibility on IGD’s rental income.”
On 30th September 2021 Fitch Ratings Ltd. has revised IGD’s Outlook to Stable from Negative, while affirming the company’s Long-Term Issuer Default Rating (IDR) and senior unsecured ratings at ‘BBB-‘. The Stable Outlook is predicated on the better visibility over the rental income, aided by a gradual recovery in consumer footfall and tenants’ sales in IGD’s shopping centres. The affirmation of the rating reflects IGD’s improving operating performance, which Fitch Ratings expect to recover to pre-pandemic levels by end-2022.
The rating agency maintained its opinion on IGD until 13 September 2023, when it decided to place IGD SIIQ S.p.A.’s “BBB-“ Long-Term Issuer Default Rating and senior unsecured ratings on Rating Watch Negative (RWN).
The RWN reflects IGD’s heightened liquidity risk as the company faces its EUR400 million bond due end-November 2024. Fitch expects to resolve the RWN if the company successfully refinances its debt at least one year ahead of the maturity.
For the complete Rating Action Commentary please visit the following link on Fitch Ratings’ website.
S&P Global Ratings released for the first time its credit opinion on IGD on 23 April 2019. The opinion of the rating agency reflects the acknowledgement of the portfolio’s quality and operating performances, the solid financial structure and the prudent strategy in place for the next three years which is focused on asset management, the disposal of non-strategic assets and the commitment to reducing the Loan-to-Value below 45%. The stable outlook also reflects S&P Global Ratings’ view that IGD will likely continue to generate stable and predictable cash flows. IGD’s solid creditworthiness, confirmed by the investment grade BBB- rating granted, will allow the company to continue to access the debt capital markets at more favorable conditions than in the past.
On 23 August 2019, after the pubblication of the 1H 2019 results, S&P Global Ratings confirmed the BBB- rating, but reviewd IGD’s outlook from Stable to Negative.
On 23 March 2020, following the COVID-19 health emergency, S&P Global Ratings downgraded IGD to BB+, confirming the Negative outlook, due to the challenging Italian retail environment and measures taken in response to the COVID-19 pandemic.
The rating agency maintained its opinion on IGD at BB+ until 11 August 2023, when, after the presentation of the results for the first half of 2023, it decided to downgrade IGD’s long-term debt rating to BB with Outlook Credit Watch Negative. This rating reflects the risk that IGD will not be able to secure sufficient liquidity sources over the next 12-18 months to cover the bond’s maturity expected in November 2024, which could lead to a rapid deterioration of its liquidity position. Given that about half of IGD’s total debt matures in 2024 and that financing costs are higher, this will weigh heavily on the cost of debt and weaken the ICR (EBITDA/financial management) ratio.
