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���������ֳ� - Warsaw - 31 Mar 2025: ���������ֳ� is maintaining MAS PLC's ratings, including its Long-Term Issuer Default Rating (IDR) of 'BB-' and its senior unsecured rating of 'B+', on Rating Watch Negative (RWN). The Recovery Rating is 'RR5'.

The RWNs reflect MAS's liquidity challenges ahead of its EUR173 million bond maturing in May 2026. In March 2025, MAS announced PKM Development Ltd's (DJV) potential acquisition of 60% of its ordinary equity from Prime Kapital (PK). If this goes ahead, MAS will own 100% of the post-transaction DJV. We expect the transaction to simplify MAS's complex corporate structure and enable MAS to directly access rents from DJV's completed commercial property assets and to raise debt against them. This should allow sufficient liquidity for MAS's debt repayment, despite its early dividend resumption if the DJV transaction is successful. The DJV transaction is subject to MAS's shareholders' approval.

���������ֳ� expects to resolve the RWNs after the shareholders' vote and our assessment of the company's plans to access additional liquidity sources ahead of its main May 2026 debt maturity.

Key Rating Drivers

Liquidity Challenges: MAS has progressed with procuring liquidity ahead of its EUR173 million May 2026 bond maturity. The disposal of its strip malls portfolio in January 2025 resulted in EUR44 million cash proceeds and around a EUR9 million reduction in its commitment to DJV to purchase certain asset extensions. MAS has also attracted EUR91 million of additional secured debt and is negotiating another EUR45 million.

Excluding the negotiated debt but including the remaining EUR55 million commitment from MAS to DJV, the ���������ֳ�-calculated liquidity gap to the May 2026 maturity remains over EUR100 million. It reduces to about EUR14 million if the negotiated debt and ���������ֳ�-forecast funds from operations (FFO) are included, as MAS has suspended its dividends. We view MAS's available unsecured funding from capital markets as limited, while its income-producing assets are almost all pledged.

DJV Transaction: MAS has announced an agreement signed by MAS, DJV and PK to allow DJV to repurchase all its ordinary equity held by PK and an early termination of the DJV joint-venture agreement. In exchange, PK is to receive (i) all DJV-owned MAS shares (140.2 million shares), (ii) the residual purchase price of EUR155.5 million consisting of DJV's residential assets and development pipeline, subject to valuation at the closing of the transaction (EUR66 million at end-2024) and the remainder in cash. If completed, DJV will become a wholly-owned subsidiary of MAS.

MAS might reduce the cash outlay to EUR30 million and fund the remainder through a planned issuance of unsecured debt maturing in April 2029 to PK (PK notes). The repurchase and the issuance of the PK notes will require separate approvals of MAS shareholders (excluding DJV- and PK-related entities holding respectively 20% and 13% of MAS).

Liquidity Post-DJV Transaction: MAS estimates that the transaction, if approved by shareholders and completed as scheduled in FY25 (financial year to end-June), will boost liquidity via access to around EUR50 million of DJV's cash. This cash may be used to fund part of the DJV share repurchase. It will also allow MAS to pledge DJV completed assets against new secured debt it plans to raise to refinance its 2026 debt maturities, If the PK notes are issued, thus reducing the cash outlay for the DJV share repurchase, MAS will be able to resume dividends from September 2025 onwards.

Limited Cash Flow from DJV: MAS is entitled to receive DJV's common stock dividends and a 7.5% coupon on its outstanding preference shares (EUR502.2 million including accrued dividend in 2024) in DJV. In the last 30 months MAS has received only EUR7 million of cash coupon as DJV's distributions are subject to a liquidity test, including planned capex. If the test is not met, the coupon is not paid but is accrued. If the DJV transaction is completed, MAS will gain direct access to DJV's commercial properties and their cash flows. The preference shares will become an intragroup item.

DJV Commercial Property Assets and Developments: At end-2024, DJV's income-producing property had a total gross asset value (GAV) of EUR369 million and generated annualised EUR24 million in net rent. In April 2025, the major extension and redevelopment of an existing enclosed mall, Mall Moldova, should complete with EUR51 million remaining capex. MAS estimates that at FYE25 DJV's GAV will exceed EUR590 million and net rent will total EUR35 million. The average gross loan-to-value (LTV) on this portfolio will be below 5%.

Complicated Corporate Structure: MAS' corporate structure is complicated by its relationship with the PK-controlled DJV, which provides it with exposure to property developments. The development projects are primarily funded through preference shares issued by DJV and subscribed to by MAS. DJV has also partially used the preference share proceeds to acquire MAS shares. If the DJV transaction is completed, this structure will be simplified.

Robust Operational Results: In 1HFY25 MAS's retail assets benefited from consumption growth in Romania. The portfolio recorded 7.3% like-for-like (lfl) net passing rent growth, aided by 9.5% rent reversion and 2.6% inflation-linked indexation. Lfl footfall increased 5.5% and tenants' lfl sales per square metre were up 7.8%. Occupancy was high at 98%, helped by a stable occupancy cost ratio of 10.6%. The performance of DJV's retail assets, managed by the MAS team, was also robust.

Moderate Leverage: Given the uncertainties of the shareholder approval of the DJV transaction, ���������ֳ� has not included its effect in its forecasts. We forecast MAS's moderate net debt/EBITDA at 6.6x in FY25, before it gradually decreases to 6.0x in FY28, helped by the dividend suspension until FY27. EBITDA interest coverage is expected at 2.3x, increasing to 3x by FY27. We include only preferred shares cash income and dividends from DJV in our ���������ֳ�-adjusted EBITDA calculation but we forecast none will be received from DJV.

Peer Analysis

MAS's fully-owned EUR1 billion retail portfolio is similar in size to the portfolio of AKROPOLIS GROUP, UAB (BB+/Stable) which owns and operates five retail assets in Lithuania (A/Stable) and Latvia (A-/Stable). While AKROPOLIS has higher asset and geographic concentration than MAS, the latter's portfolio is predominantly in Romania (BBB-/Negative) whose operating environment is weaker than in Lithuania and Latvia.

The portfolios of NEPI Rockcastle N.V. (BBB+/Stable), valued at EUR7.6 billion; Globalworth Real Estate Investments Limited (BBB-/Stable), valued at EUR2.6 billion; and Globe Trade Centre S.A. (GTC; BB+/Negative) valued at EUR2.5 billion (pro-forma for a German residential portfolio acquisition), are bigger and more diversified. However, only GTC is diversified between retail, offices and residential for rent.

MAS differs from other rated EMEA real estate companies in its complex corporate structure, where new properties are exclusively developed and held through the PK-controlled DJV but financed with MAS-committed preferred equity. Peers typically directly develop and own their assets or through jointly controlled JV structures.

MAS's forecast net debt/EBITDA at 6.6x is higher than AKROPOLIS's net debt/EBITDA of below 4.0x until 2026 and a LTV below 35%. NEPI's net debt/EBITDA is forecast at below 6.0x. MAS's financial profile is affected by its liquidity challenges ahead of its FY26 debt maturities.

Key Assumptions

���������ֳ�'s Key Assumptions Within Our Rating Case for the Issuer

- ���������ֳ� analyses MAS's financial profile on a standalone basis. Only dividends and cash-paid preference share coupons received from DJV (generated from recurring, rental-derived, post-interest expense profits) are included in ���������ֳ�-adjusted EBITDA and are assumed at zero in the forecast period

- Lfl net rental income growth of 9% in FY25 and around 2% thereafter due to indexation and rent increases on renewals

- No dividends paid by MAS in FY25 and FY26 and 90% of FFO thereafter

- No acquisitions, except EUR14 million for two small extensions still held by DJV and subject to a put option available to DJV

- Remaining commitments to DJV at FYE24 of EUR42 million preference shares and a EUR30 million revolving credit facility (RCF) assumed to be paid in FY25

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

- Failure to address the May 2026 bond maturity by at least end-May 2025

- A 12-month liquidity score below 1x on a sustained basis

- Material deterioration in operating metrics, such as occupancy below 90%

- Net debt/EBITDA (including cash-paid preference share coupons) exceeding 8.5x

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

- Successfully refinancing, or securing sufficient liquidity to refinance, its May 2026 bond

Liquidity and Debt Structure

MAS's liquidity is moderate. At end-2024, MAS had EUR145 million of readily available cash, including EUR35 million in units of BlackRock ICS Euro Government Liquidity Fund Core (AAAmmf), a money market fund. MAS has access to an undrawn RCF of EUR20 million, which however matures in November 2025. These amounts cover the next 12 months of debt amortisations and undrawn commitments of EUR69 million towards DJV (including DVJ's put option on the two remaining EUR14 million assets' extensions). Significant debt maturities are scheduled for FY26, mainly the EUR173 million May 2026 maturity.

If the DJV transaction does not go ahead, MAS has different options to address its inadequate liquidity, including additional secured debt, asset disposals and issuing new unsecured debt.

Issuer Profile

MAS is a real estate company that owns and operates a portfolio of retail assets, mainly in Romania, but also in Bulgaria and Poland. The shopping centres are largely in secondary locations weighted towards convenience-led stores. MAS has exposure to asset development exclusively through DJV.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS

to access ���������ֳ�'s latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in our credit analysis. ���������ֳ�'s macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included.

ESG Considerations

MAS has an ESG Relevance Score of '4' for Group Structure due to the group's complexity, which includes disclosed related-party transactions (including preference shares, a previous property disposal transaction to MAS) and cross-holdings (such as the unusual circumstance of DJV owning shares in MAS). This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors.

MAS has an ESG Relevance Score of '4' for Governance Structure due to the potential for conflicts of interest and related-party transactions. While common management between MAS and the DJV has been significantly reduced, at FYE24 MAS disclosed that DJV owned around 19% of MAS. MAS's majority-independent board members oversee most dealings and transactions, mitigating the risk of conflicts of interest. This governance structure has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors.

The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ���������ֳ�'s ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. For more information on ���������ֳ�'s ESG Relevance Scores, visit /topics/esg/products#esg-relevance-scores.

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APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

• Corporate Monitoring & Forecasting Model (COMFORT Model), v8.1.0 (1)

ADDITIONAL DISCLOSURES

• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS