S&P upgraded ratings of Seazen Group and its subsidiary Seazen Holdings to BB+ from BB with a stable outlook. The upgrade comes on the back of increased recurring rental income, steady growth in contracted sales and stable leverage. S&P said Seazen’s ability to expand its recurring rental income will help to improve its debt-servicing supported by full-year contributions from 30 malls that opened in the last quarter of 2020 and the opening of 26 new malls in 2021. With this, rental income interest coverage is to improve to 100-110% in 2021 from 81% in 2020. Despite the pandemic, S&P notes Seazen had robust revenue increases of 71% in 2020. While they expect Seazen’s gross margin to mildly drop to 18%-20% from 21.6%, they expect the developer’s land costs to fall. The agency also expects Seazen to maintain stable leverage as currently, with the debt to EBITDA at 4x-4.5x in 2021 and 2022.
Seazen’s dollar bonds were stable – its 4.45% 2025s were up 0.2 to 99.88, yielding 4.5%.
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