Moody's assigns NEXT Properties Baa2

Moody’s Investors Service said it assigned a Baa2 issuer rating to NEXT Properties with a stable outlook.

“The Baa2 rating reflects NEXT Properties' status as the largest industrial real estate investment trust (REIT) in Mexico and the positive momentum in the current Mexican environment due to the nearshoring trends particularly in the industrial segment. The rating also considers the benefits from reputable shareholders with management track record capitalizing projects under Banco Actinver, SA Fideicomiso Fibra Uno 1401 (Fibra UNO or FUNO, Baa2, negative), owner of approximately 80% of the industrial portfolio of NEXT Properties,” Moody’s said in a press release.

The agency added, “NEXT Properties has adequate credit metrics aligned within its rating category, including leverage (measured as total debt plus preferred stocks / gross assets) below 35% and net debt / EBITDA at 5x for the next 2 years, as well as a liquidity position with no relevant maturities until 2026. Additionally, NEXT Properties has a larger gross assets base of $8.4 billion compared to $3.45 billion average from its rated peers.”

Working against NEXT is its lack of track record under its new configuration, the needs for investment in Mexican infrastructure to meet demand and its exposure to Mexico’s economic fundamentals, Moody’s said.

“The stable outlook reflects Moody's expectation that NEXT Properties will successfully complete the milestones set to create the company including the initial public offering (IPO), the contribution of both, FUNO and Jupiter properties,” the agency said.

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