Moody's upgrades TLG notes

Moody's Investors Service said it upgraded to Baa1 from Baa2 the ratings of the senior unsecured bonds originally sold by TLG Immobilien AG and for which Aroundtown SA has been substituted as the issuer. TLG remains the notes’ guarantor.

Moody's also boosted to Baa3 (hyb) from Ba1 (hyb) the subordinated, or hybrid, notes originally issued by TLG Finance Sarl. Aroundtown also replaced TLG Finance as the issuer of the notes. TLG is no longer guarantor of the hybrid notes. The agency changed the outlook on both companies to stable from positive.

"The rating upgrade of the debt instruments reflects the enhanced credit quality of the notes following TLG and TLG Finance Sarl being substituted by Aroundtown as the issuer. It also reflects the successful operational and financial integration of TLG into Aroundtown SA over the last 15 months and despite the tough economic climate because of the coronavirus pandemic. A strong combined credit profile mitigates the weaker operating environment, especially at the segments most affected by the coronavirus pandemic, such as hotel and non-essential retail assets," said Ana Luz Silva, a Moody’s vice-president, senior analyst and lead analyst of TLG, in a press release.

The stable outlook reflects the expectation Aroundtown will continue to deliver robust operational performance backed by its solid business profile, which reduces the risks stemming from a weaker operating environment, the agency said.

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