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Bond Market News
GLP China Downgraded to BB from BBB- by S&P
November 3, 2023
GLP China was downgraded to BB from BBB- by S&P, its second downgrade since mid-October where Fitch also downgraded them to BB. The rating action comes on the back of a deterioration in credit quality due to “delays in executing its asset monetization strategy”. S&P does not expect GLP to meet its target of completing its asset monetization of logistics assets in China by end-2023 after the company took the step earlier this year. Thus, the delay in cashflows would only see it partly collect the outstanding receivables whilst having a “prolonged exposure to significant related-party receivables”. S&P cut its forecast for 2023 full-year net proceeds via asset monetization to $3.9bn from $5-7bn. They expect GLP to receive $2.8bn in net proceeds in H2 2023 of which GLP has contracted $2-2.2bn of divestments in Q3. The remaining proceeds should happen via transactions that are in advanced stages. The rating agency also notes that the “persistent high proportion of non-recurring EBITDA” is a drag on GLP’s credit quality. They expect its earnings quality to weaken. With short-term debts jumping higher to $6.5bn at end-June from $2.8bn at end-2022, its liquidity coverage is only about 1.1x over the period until H2 2024.
GLP’s dollar bonds were trading weaker with its 3.875% 2025s dropping to 61.53 cents on the dollar.
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GLP & GLP China Downgraded to BBB-
April 26, 2021
GLP Downgraded to BB by Fitch
October 17, 2023
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