Moody's Investors Service has downgraded GPT Group, adding $20 million to the debt-laden group's annual interest payments.

Moody's yesterday lowered GPT's long-term issuer and senior unsecured ratings from Baa2 to Baa3, resulting in the margin on drawn debt rising by 0.5%.

Moody's vice-president and senior analyst Clement Chong said: 'GPT has to make more asset sales to remove our concerns because of difficulties in raising more capital.'

He said Moody's also expected GPT to renegotiate to raise its covenant level to further reduce the risk of breaching its covenant.

The Australian