Fitch sees rating iStar notes BB

Fitch Ratings said it expects to assign a rating of BB to iStar Inc.’s proposed offering of $500 million of senior unsecured notes.

Fitch doesn’t see the offering affecting iStar’s leverage. The company plans to use the proceeds to repay debt, including $375 million of 6% senior unsecured notes due April 2022 and prepayment penalties and fees, and the remainder to pay down borrowings under its senior secured term loan due June 2023.

“The expected rating on the new senior unsecured notes is equalized with the ratings assigned to iStar’s existing senior unsecured debt, as the new notes will rank equally in the capital structure. The unsecured debt rating is one notch above iStar’s long-term issuer default rating and reflects the availability of sufficient unencumbered assets, which provide support to unsecured creditors, and relatively low levels of secured debt in the firm’s funding profile. This profile indicates good recovery prospects for unsecured debtholders under a stressed scenario. In addition, the company adheres to a 1.2x unencumbered assets-to-unsecured debt covenant, which provides protection to bondholders during periods of market stress,” said Fitch in a press release.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.