S&P puts Kennedy Wilson Europe on watch

S&P said it placed the BBB long-term corporate credit and issue ratings on Kennedy Wilson Europe Real Estate plc on CreditWatch with negative implications.

The CreditWatch placement follows news that Kennedy-Wilson Holdings Inc. intends to take full control of Kennedy Wilson Europe, S&P said.

If the transaction receives approval from Kennedy-Wilson's independent shareholders, the parent company will increase its participation in its subsidiary from 23.7% to 100%, the agency explained.

S&P said it understands that no leverage will be used in this all-share merger transaction.

Until now, the agency said it assessed Kennedy Wilson Europe on a stand-alone basis due to the parent company's limited ownership.

But if the planned transaction successfully goes ahead, S&P said it would likely see Kennedy Wilson Europe becoming integral to the group's corporate structure and future strategy.

The absorption would likely be credit negative for Kennedy Wilson Europe given that the company's business model is considered riskier and more volatile, the agency said.

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