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Investing.com -- Global Net Lease Inc. (NYSE:GNL) received a credit rating upgrade to ’BB+’ from ’BB’ by S&P Global Ratings following the company’s completed sale of its multi-tenant portfolio.
The rating agency also upgraded GNL’s senior unsecured notes to ’BBB-’ from ’BB+’ while maintaining the ’2’ recovery rating. All ratings were removed from CreditWatch, where they had been placed with positive implications on February 27, 2025.
GNL completed the sale of its multi-tenant portfolio for approximately $1.8 billion in gross proceeds, using a significant portion to reduce debt. During the first quarter of 2025, the company reduced net debt by $833 million after closing the first phase of the transaction for $1.1 billion.
As of March 31, 2025, GNL’s net debt to adjusted EBITDA ratio was 6.7x. S&P expects this ratio to rise to the mid- to high-7x range by year-end 2025 as the full impact of lower EBITDA from the dispositions flows through calculations.
The transaction transforms GNL into a pure-play, single-tenant net lease company, which S&P views as a positive business simplification despite resulting in a smaller portfolio. The sale is expected to generate cash savings from reduced capital expenditures and administrative expenses while eliminating complexities of owning multi-tenant retail properties.
The transaction has improved several key operating metrics, including increasing occupancy to 98% from 96%, extending the weighted-average remaining lease term to 6.4 years from 6.3 years, and raising the proportion of investment-grade tenants to 66% from 60.5%.
S&P’s stable outlook reflects expectations that GNL will maintain sound operating performance supported by its diversified portfolio, high occupancy, minimal near-term lease expirations, and long-term triple-net leases. The agency expects the company to continue focusing on non-core asset sales and balance sheet management over the next two years.
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