Fitch Ratings has placed Hammerson Plc's BBB+ long-term issuer default rating and senior unsecured rating of A- on rating watch negative after the company agreed to an all-share agreement to acquire Intu Properties Plc.
The rating agency believes that the deal could weaken the combined company's financial leverage metrics to a level more equivalent to a lower rating. Additionally, secured debt is expected to make up a higher proportion of the new company's capital structure, which could limit its contingent liquidity and negatively affect recovery potential for its unsecured debt, Fitch said.
But Fitch also added that the takeover is expected to enhance Hammerson's business profile and boost its asset diversification.
Separately, Moody's kept its ratings outlook stable for Hammerson, while affirming its Baa1 long-term issuer and senior unsecured debt ratings.