Fitch rates NEPI Rockcastle bond BBB

Fitch Ratings said it assigned a senior unsecured rating of BBB to NEPI Rockcastle plc's €1 billion euro medium-term note program and proposed bond.

The notes will be issued by NE Property Cooperatief UA, a 100% owned, Netherlands-based subsidiary of NEPI Rockcastle (BBB/stable).

The program's rating is aligned with NEPI Rockcastle's issuer default rating, reflecting NEPI Rockcastle's parent guarantee over the program.

Fitch said the notes, which will rank at least pari passu with all present and future unsecured obligations, as well as the guarantee, constitute general and unconditional obligations of NEPI Rockcastle as the guarantor.

The company will use the proceeds from notes issued under the program for general corporate purposes, including property acquisitions and developments, refinancing and working-capital management.

Fitch said the rating reflects NEPI Rockcastle’s portfolio of dominant shopping centers in eight central and eastern Europe (CEE) countries, mainly Romania (39% by market value) and Poland (29% by market value).

“The average occupancy rate exceeds 95%, with an average lease maturity of 4.2 years and high renewal rates. The tenant profile has good granularity and predominantly comprises large international and local companies. The company has maintained conservative finances despite rapid growth, in part due to strong shareholder support,” the agency said in a news release.

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