Moody’s gives Deutsche Wohnen notes A3

Moody's Investors Service said it assigned an A3 instrument rating to the proposed €500 million senior unsecured notes due 2025 to be issued by Deutsche Wohnen AG.

The outlook is stable.

The assigned rating assumes there will be no material variations to the draft legal documentation and the size of the issuance remains subject to market conditions.

Deutsche Wohnen's A3 long-term issuer rating and stable outlook are unaffected.

Moody’s said the A3 rating is in line with the Deutsche Wohnen's long-term issuer rating. The notes will be effectively subordinated to all existing and future secured debt of the issuer to the extent of the value of the assets securing such debt.

Nevertheless, Moody's has not notched the instrument rating down from the issuer rating because: (a) The probability of default is extremely low given the strength of Deutsche Wohnen's credit profile and rating; and (b) Deutsche Wohnen intends to increase the pool of unencumbered assets by financing acquisitions with unsecured debt, as well as refinancing some secured debt with unsecured debt. The current issuance will help accomplish this, the agency said.

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