Fitch Ratings rates Majid Al Futtaim's (MAF) hybrid notes BB+.
Fitch Ratings has assigned UAE-based MAF’s benchmark-size subordinated perpetual hybrid notes a final rating of BB+. The notes qualify for 50 per cent equity credit.
The recently placed $400 million notes was priced at 6.37 per cent and will be used to refinance MAF's existing 2013 hybrid notes and for general corporate purposes. According to Fitch, the notes are rated two notches below MAF's Long-Term Issuer Default Rating (IDR: BBB/Stable) given their coupon deferral and deep subordination, which resulted in higher non-performance and lower recovery prospects in a liquidation or bankruptcy scenario relative to senior obligations.
The notes are issued on a subordinated basis by MAF Global Securities, constituted by a trust deed, made between the issuer, MAF and Majid Al Futtaim Properties (MAFP) with MAF and MAFP each being the guarantor. The notes rank pari passu among themselves and junior to MAF's senior securities.