S&P puts Citycon on positive watch

Standard & Poor's said it placed its BBB- long-term and A-3 short-term corporate credit ratings on Citycon Oyj. on CreditWatch with positive implications.

The CreditWatch placement follows Citycon's announcement of its proposed directed share issue of roughly €200 million and proposed rights issue of about €200 million.

The agency believes that the transaction should result in significantly quicker deleveraging than it previously anticipated.

Proceeds are estimated to go toward reducing Citycon's debt by about €300 million thereby significantly decreasing financial expenses going forward.

Consequently, S&P forecasts that the EBITDA-to-interest ratio will likely rise to between 2.5x and 3.0x and the ratio of debt to debt and equity ratio could decrease below 50% over the three months following the transaction. S&P said it would view these ratio levels as commensurate with an "intermediate" financial risk profile and a higher rating.

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