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LUXEMBOURG - Standard & Poor’s (S&P) has downgraded the credit rating of Aroundtown SA, a leading German commercial real estate company, from BBB+ with a negative outlook to BBB with a stable outlook. This adjustment reflects concerns over anticipated delays in the company’s asset disposal activities due to recent market volatility and a weakening economy in Germany.
The credit rating agency acknowledged that Aroundtown had improved its debt to capitalization ratio from 55.5% in March 2024 to 52.1% by December 2024. Despite these deleveraging efforts, S&P cited negative market sentiment as a reason for the rating action, rather than allowing more time for the company to complete its planned disposals.
Aroundtown, trading under the ticker symbol AT1 on the Prime Standard of the Frankfurt Stock Exchange, has responded to the downgrade by highlighting its significant progress in strengthening its financial position and credit metrics. The company has undertaken various credit-enhancing measures, including asset disposals, dividend suspension, perpetual note exchanges, and liability management exercises.
The company believes that its diversified portfolio, which includes properties in prime European city locations, will continue to drive operational growth and help offset potential economic headwinds. Aroundtown remains dedicated to maintaining a conservative financial profile, with a loan-to-value ratio of 42% at the end of 2024, and is committed to executing transactions beneficial to all stakeholders.
The downgrade also affects the credit rating of Aroundtown’s bonds, which have been lowered by one notch to BBB, and its perpetual notes to BB+. The company anticipates that its ongoing measures and operational growth will support its credit metrics under S&P’s methodology.
This news is based on a press release statement from Aroundtown SA and does not constitute an endorsement of the company’s claims. The information presented here is intended for informational purposes only.
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