S&P Global Ratings affirmed all ratings, including its BBB corporate credit rating, on Brookfield Property Partners LP, or BPY.
The outlook is stable.
The action comes after the company signed an agreement to buy out the remaining 66% of GGP Inc. that it does not own for an aggregate $15 billion, which the buyer intends to finance with a mix of 61% cash and 39% equity.
The affirmation echoes the marginal improvement in credit metrics at the consolidated BPY level. The rating agency projects debt to EBITDA to fall marginally to the mid-13x range and fixed-charge coverage to improve to roughly 1.5x.
The stable outlook mirrors S&P's expectation that pro forma for the GGP acquisition, consolidated BPY credit metrics will improve slightly with debt to EBITDA falling to the 13x area and fixed-charge coverage strengthening to roughly 1.5x compared with the company's stand-alone metrics at 14.3x and 1.4x, respectively.
The rating agency also expects BPY to use asset sale proceeds from joint ventures to further deleverage its balance sheet in the next two years, and projects same-store net operating income growth to remain steady and development completions to boost growth.
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.