S&P: BR Properties S. A. 'BB-' Ratings Affirmed, Outlook Remains Stable
The ratings affirmation and stable outlook reflect our view that BR Properties will improve its credit metrics by 2017 on the back of higher occupancy and lower interest rates. Expected improvements in macroeconomic conditions in Brazil during 2017 would also allow BR Properties to keep its EBITDA margins above 80%, thanks to its high quality portfolio, despite its reduced size.
The stable outlook reflects our expectation that a still uncertain macroeconomic scenario and high interest rates will continue to pressure company's EBITDA interest coverage and FFO to debt in the short term, despite the recent debt reductions. Nevertheless, economic recovery from 2017 on should result in increasing cash flow generation leading to stronger credit metrics.
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