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S&P affirms Unibail-Rodamco ratings

S&P Global Ratings affirmed its A/A-1 long- and short-term ratings on Unibail-Rodamco SE, with a stable outlook.

The rating agency also affirmed its A issue rating on the company's senior unsecured debt and the A-1 issue rating on its commercial paper.

The affirmation comes after the French retail landlord announced plans to buy Australia-based Westfield Corp. in a US$15.68 billion deal to create the world's second-largest owner of retail real estate.

S&P described Westfield's assets as a good fit with those of Unibail-Rodamco and expects the combined company to maintain a high occupancy rate and stable rents. The agency said the funding of the acquisition will temporarily weaken Unibail's credit metrics, but added that these should remain at acceptable levels. It also noted that the deal introduces a risk of currency swings for the group.

The stable outlook reflects S&P's view that the companies' combined portfolio will continue to attract footfall and cope with the threat of e-commerce growth. The agency also noted Unibail's plans to shed at least €3 billion of assets in the medium term, which it expects the company to achieve while maintaining EBITDA interest coverage above 3.0x and debt-to-debt plus equity at under 50%.

S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.