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S&P raises Inmobiliaria ratings after proposed stake boost in Société Foncière

S&P Global Ratings upgraded its long-term issuer credit rating on Spanish real estate investment trust Inmobiliaria Colonial SOCIMI SA to BBB+ from BBB, and affirmed its BBB+/A-2 long- and short-term issuer credit ratings on its French subsidiary Société Foncière Lyonnaise, or SFL.

The outlook is stable.

The rating agency also raised its ratings on Colonial and its senior unsecured debt to BBB+ from BBB, and affirmed the BBB+ issue rating on SFL's senior unsecured debt.

Colonial recently agreed to purchase a further 22.2% interest in SFL from the Qatar Investment Authority under a €718 million deal.

According to a note, Colonial's credit ratios will remain largely unaffected by the transaction, with S&P listing a leaner corporate structure and a significant controlling stake in SFL as byproducts of the deal.

The stable outlook factors in S&P's view that Colonial's assets should continue to generate stable recurring income and enable the maintenance of an EBITDA interest coverage of roughly 3x and a debt-to-debt-plus-equity ratio of less than 45% in the next two years. S&P believes that SFL will remain core to Colonial's future strategy.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.