S&P rates Grand City hybrids BBB-

S&P said it assigned its BBB- issue rating to the subordinated hybrid notes Grand City Properties SA plans to issue under the company's exchange offer.

GCP is offering to exchange two of its perpetual subordinated hybrid notes with a current value of €550 million. The exchange offer will be carried out for a par combination of newly planned hybrid notes and a cash component; notes not exchanged will remain outstanding.

“We rate the proposed perpetual subordinated hybrid notes two notches below the issuer credit rating on GCP. The rating difference reflects our notching methodology, which calls for deducting one notch for subordination because our long-term rating on GCP is investment-grade (BBB- or higher). We deduct an additional notch for payment flexibility because the option to defer interest stands with GCP,” S&P said in a press release.

The outlook is negative.

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