OREANDA-NEWS. July 01, 2015. Fitch Ratings expects the rating Outlook to remain Stable with limited negative rating actions for the main players in the Brazilian shopping mall industry during 2015. Despite a challenging business environment, the sector's resilient operational performance is expected to continue. The industry's fundamentals, which include stable revenue adjusted for inflation, are expected to overcome the challenging macroeconomic environment during 2015. Healthy occupancy and same store rent (SSR) levels reflect the industry's business resilience. The sector's leading companies are anticipated to maintain healthy occupancy rates of around 96%, while late payments are expected to remain at manageable levels of around 3%.

Cash flow generation is expected to remain stable during 2015 due to revenue and lease structures that incorporate fixed and inflation-adjusted components that reduce volatility in revenues and margins. The sector's average EBITDA margin is expected to remain solid at around 72%.

Fitch does not expect the main players in the Brazilian mall industry to increase leverage from currently adequate levels considering expectations of slower business growth with limited acquisition activity or new greenfield projects. Net leverage across the sector is anticipated to remain around 4.5x, which is viewed as relatively low when compared with global players.

Liquidity for the largest corporates is expected to remain adequate based on likely levels of cash, interest coverage ratios, unencumbered assets, and access to equity and debt markets. The sector's average coverage ratio, measured as total EBITDA/interest expense, is expected to remain stable in the 2x to 3x range during 2015. FX exposure, leverage, and liquidity are credit quality factors under control for most of the main players.