Moody’s rates TLG notes Baa2, hybrids Ba1

Moody’s Investors Service assigned a Baa2 rating to TLG Immobilien AG’s new senior notes offering and a Ba1 (hyb) rating to the new backed subordinate notes sold by TLG Finance Sarl and guaranteed by TLG.

“Following the acquisition by TLG of a 9.99% stake in Aroundtown SA (not rated) from majority shareholder Avisco Group plc for €1.02 billion, TLG will issue inaugural backed subordinate (hybrid) notes and its third senior unsecured bond, in order to secure the long-term funding for the purchase of an additional 4.99% stake in Aroundtown for €500 million. TLG has funded part of the total €1.5 billion price consideration with €700 million cash and has in place a €800 million acquisition bridge facility,” Moody’s said in a press release.

The agency revised the outlook for TLG to positive from stable. The outlook for TGL Finance is positive.

“Outlook was revised to positive from stable, reflecting that a merger would create an entity with a robust risk profile, supported by a scale of around €25 billion and greater diversification across geographies and real estate segments. Moreover, the potentially combined entity would benefit from increased financial flexibility underpinning company's growth prospects,” said Ana Luz Silva, a Moody’s assistant vice president – analyst and lead analyst for TLG, in a press release.

Moody’s also affirmed the company’s Baa2 ratings.

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