S&P assigns Scentre notes BBB+

S&P said it assigned a BBB+ long-term issue rating to the $1.5 billion non-call six-year and $1.5 billion non-call 10-year subordinated fixed-rate reset notes to be issued by Scentre Group Trust 2, an issuing entity of Scentre Group.

The rating is two notches down from Scentre’s A issuer rating. S&P said it deducts one notch for subordination and another for the option to defer interest.

The subordinated notes mature in September 2080, with the non-call six-year note callable in 2026 and the non-call 10-year note callable in 2030. The coupon is fixed until the first call date in year six and year, respectively. The interest rate resets every five years after that at the five-year U.S. Treasury rate plus the prevailing margin rate. “We expect that, on a pro forma basis, the hybrid notes will not exceed 15% of the group's total capitalization,” S&P said in a press release.

Scentre Group intends to use the proceeds for general corporate purposes, including refinancing maturities of about A$950 million within the next 12 months.

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