Investing.com -- Moody’s Ratings has confirmed the Baa3 long-term issuer rating and Baa3 senior unsecured ratings of CTP N.V. The outlook has been revised to positive from stable.
The positive outlook shift is due to CTP’s improved business profile, consistent operating performance growth, and the potential for enhanced credit metrics in the next 12 to 24 months. CTP’s continued growth in operating performance, even in a challenging macroeconomic environment, could lead to further upward rating pressure. This would require a balanced combination of retained earnings, equity, and debt to finance acquisitions and growth capital expenditures, maintaining leverage metrics consistent with a higher rating category.
CTP’s business profile, including its absolute scale, market position, and diversification, is seen as a key credit strength. The company has secured a leading market position in the Central and Eastern European (CEE) light-industrial and logistics real estate markets through a mix of acquisitions and own developments. It has a strong presence in core CEE markets and an expanding presence in Germany. CTP’s diverse and good-credit-quality tenant base and ongoing structural demand drivers benefit its well-performing asset portfolio.
CTP’s consistent growth in operating performance is driven by development activities and further rental growth of its assets, with largely stable vacancy rates. The company has a strong track record in asset management and development projects on a mostly owned landbank.
The company’s rating is constrained by its largely debt-funded acquisitions and developments on a partial prelet basis, which impact Moody’s-adjusted debt/assets and fixed charge cover ratio. Moody’s-adjusted gross debt/assets is expected to improve from the 49.9% as of Q1 2025, and interest cover is expected to recover from the current level of 2.4x.
An improvement in the net debt/EBITDA ratio is expected, driven by anticipated growth in rental income, even in a more challenging macroeconomic environment. The ongoing structural shift of capacity towards Eastern European countries is likely to sustain demand growth for light-industrial and logistics assets.
CTP’s liquidity is adequate, covering cash needs for the next 12 months. The company had €1.8 billion in cash and cash equivalents as of Q1 2025 and has access to an undrawn €1,300 million revolving credit facility maturing in December 2029. FFO generation of around €370 million is expected for 2025.
The main use of CTP’s liquidity continues to be developments and acquisitions. Between €1.2-1.3 billion capital spending, including €200-400 million for acquisitions in 2025 and 2026, is anticipated. Debt maturities remain moderate with €547 million in 2025 and €698 million in 2026. CTP’s efforts to diversify its funding sources are positively recognized.
Factors that could lead to an upgrade or downgrade of the ratings include Moody’s-adjusted gross debt/assets towards 45% and net debt to EBITDA sustainably below 11x, robust operating performance growth and modest vacancy rates, Moody’s-adjusted fixed charge coverage ratio sustained above 2.75x, and balanced funding of development risk activities.
Conversely, failure to comply with its financial policy or Moody’s adjusted leverage sustainably above 50%, fixed-charge coverage ratio reducing towards 2.25x, failure to maintain adequate liquidity, an adequate unencumbered asset base, a staggered maturity profile with substantial buffers to covenants, or increasing development exposure or weak letting performance in development business could lead to a downgrade.
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