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January 16, 2008 |
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CENTRO PROPERTIES: S&P Remains CCC+ Rating on CreditWatch Standard & Poor's Ratings Services said that its 'CCC+' issuer credit ratings on Centro NP LLC remain on CreditWatch with developing implications, where they were placed on Jan. 3, 2008. The 'CCC+' senior-unsecured debt and 'CCC-' preferred stock ratings on Centro NP (formerly New Plan Excel Realty Property Trust) also remain on CreditWatch with developing implications. This CreditWatch update follows a series of announcements made earlier by Centro Properties Group on the company's refinancing plans for its maturing bank debt and progress made on the group's "strategic review". Collectively, the announcements do not have an immediate effect on the Centro NP ratings. The announcements were: * NP's U.S. private-placement noteholders, owed US$450 million, agreed with CNP not to act on rights under their note purchase agreement which could potentially accelerate repayment of this debt before Feb. 15, 2008. This is consistent with the deadline for the rollover of substantial debt facilities at CNP. * As a consequence of the inability to rollover CNP's interest-rate and foreign-exchange hedging, the company advised that its net foreign-currency equity exposure to movements in the Australian and U.S. dollars is currently US$4,473 million, of which 80.7% is hedged, from 99.2% previously. * CNP is reviewing the classification of current and non- current interest-bearing liabilities reported in CNP's audited financial statements to June 30, 2007. * The sale process-of a whole-of-group review, which may include a recapitalization, equity issuance, or acquisition of CNP, and/or the sale of the group's interest in its Australian and U.S. wholesale funds-is continuing. * The appointment of Glenn Rufrano as chief executive officer of CNP. Mr. Rufrano succeeds Andrew Scott, who resigned. "These announcements do not change the near-term probability that Centro NP could be put into default by its creditors, notwithstanding that the company's operating assets remain of good quality," Standard & Poor's credit analyst Craig Parker said. Given the uncertainty facing the group, the issuer rating on Centro NP could move either up or down from 'CCC+'. A downgrade would be precipitated by Centro NP not being able to seek an extension of its debt facility beyond Feb. 15, 2008. There is also a prospect that some lenders within the CNP group may selectively rollover facilities that have recourse to favorable assets, while other lenders may seek repayment on Feb. 15, 2008. On the other hand, the ratings could be raised if CNP and Centro NP are able to present a strategic plan that satisfies the bank lenders and facilitates an extension of the debt facilities. This may provide CNP and Centro NP with adequate time to reduce debt levels while enabling the assets to be managed and retain their market value. About Centro Properties Centro Properties Group -- http://www.centro.com.au/ -- is an Australia-based company that comprises the operations of Centro Property Trust (the Trust) and its entities, which are engaged in property investment, property management, property development and funds management. The Company operates in two business segments: property ownership business and services business. The Company derives income from retail property rentals of shopping center space to retailers across Australasia and the United States. It also derives income from its retail property investments in listed and unlisted entities. Its services business activities include incorporating funds management, property management and development and leasing. During the fiscal year ended June 30, 2007, the Company acquired New Plan Excel Realty Trust (New Plan), Heritage Property Investment Trust (Heritage) and Galileo Funds Management, as well as assumed full ownership of its United States management operations. The Troubled Company Reporter-Asia Pacific reported on Jan. 4, 2008, that Standard & Poor's Ratings Services lowered its issuer credit, senior-unsecured debt and preferred stock ratings to 'CCC+' with negative implications reflecting the potential of the group's assets to be sold in softening market conditions, particularly in the U.S. |
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