Fitch Ratings Ltd. rating on IGD

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.”

The rating obtained by Fitch is currently the only one in the investment grade area attributed to IGD.

BBB-
corporate rating
Negative
outlook
22 October 2019
date of first release
1 October 2020
date of latest update

S&P Global Ratings rating on IGD

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 due to the challenging environment of the retail sector, to the weaker half-year operating performance and to the pression on evaluations that could impact on the financial leverage.

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, that could negatively impact on the operating performance and consequently on the estimates and on the leverage ratios, but recognizing the company’s robust liquidity profile.

S&P Global Ratings rating

BB+
Corporate rating
Negative
Outlook
23 April 2019
Date of first release
23 March 2020
Date of latest update

Moody’s rating on IGD

Moody’s released for the first time its credit opinion on IGD’s long term debt on 17 May 2016. On 21 December 2017, thanks to the positive performance recorded throughout the year, Moody’s confirmed the rating Baa3 on our debt with a stable outlook: this allow us to access to the debt capital markets at conditions aligned to those of issuers with the best creditworthiness. On 30 May 2018, following the decision of evaluating the possibility to downgrade Italy,s sovereign rating, Moody’s change its outlook for IGD from stable to negative.

On 9 April 2019 Moody’s decided to decrease the rating to Ba1 with stable outlook due to the potential negative impact in the future of the current Italian macroeconomic conditions, with respect to both the real estate sector in which the Company operates (retail) and exogenous factors.  At the same time, Moody’s confirmed its positive opinion of the results the Company achieved in 2018 which testify to the management’s ability to ensure solid and stable results over time, the cornerstone of the Company’s fundamentals. On 2 July 2019, Moody’s carried out a periodic review of the rating, maintaining its judgment unchanged.

On 9 July 2020 Moody’s downgraded IGD’s long term corporate family rating from Ba1 to Ba2 with outlook stable due to the rapid spread of the coronavirus outbreak and deteriorating global economic outlook that have created an unprecedented credit shock across a range of sectors and regions. Moody’s action reflects the deterioration in IGD’s credit quality due to exposure to the Retail Real Estate industry, one of the most hit sector. IGD’s net rental income generation will be additionally challenged by the expected sharp contraction of the Italian economy in 2020 and its limited recovery in 2021. More positively IGD’s rating is supported by its food-anchored portfolio of convenience shopping centres, that provide some element of rental income resilience and stability. Fixed charges coverage ratio will remain solid at around 3x as a result of the company’s operational efficiency and the recent refinancing measures, which also have bolstered the company’s liquidity.

Moody's Rating

Ba2
Corporate rating
stable
Outlook
17 May 2016
Date of first release
9 July 2020
Date of latest update
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