The Negative Outlook continues to reflect Vonovia’s high leverage and the risk that the loan/value ratio remains above 45%, despite ongoing asset disposals, deleveraging measures and improved market conditions.

The Negative Outlook reflects the significant risk that high leverage may persist for a prolonged period, despite the company’s ongoing deleveraging efforts through asset sales.

The change in Outlook to Negative is due to the increased risk that deleveraging efforts might fail to produce a leverage ratio in line with the current rating.

The affirmation is supported by the strategy to suspend issuance of incremental debt, which benefits credit metrics and expands the buffer against the effect of weaker sentiment in the German housing market.

The affirmation is driven by Vonovia’s successful deleveraging efforts following the acquisition of Deutsche Wohnen S.E., with credit metrics reaching a level commensurate with the ratings in the coming months.

The affirmation is driven by the credit-neutral impact of a successful acquisition of Deutsche Wohnen S.E., with a clear path to deleveraging bringing credit metrics back to pre-transaction levels by YE 2022 at the latest.

The affirmation is driven by Vonovia's strong business risk profile, which supports cash flow generation, leading to stable credit metrics with limited downside volatility.

The rating reflects the issuer's strong business risk profile backed by an increasing share of rental income from outside of Germany following merger control clearance for the Hembla AB acquisition, while credit metrics remain stable.