S&P gives Washington Prime B, loan B+

S&P said it gave Washington Prime Group LLC, which emerged from Chapter 11 on Oct. 21, a B issuer rating and a B+ issue-level and 2 recovery ratings to its senior secured first-lien term loan due in 2025. The 2 recovery rating indicates expectations for substantial (70%-90%; rounded estimate: 85%) recovery in default.

“We expect WPG's small to midsize operating portfolio to remain largely unchanged over the next several years. Washington Prime Group owns and operates a $5.5 billion portfolio of on an undepreciated basis. The company's portfolio includes 92 properties totaling 47 million square feet, with a relatively equally weighting of enclosed malls and open-air centers, located across the U.S., with some concentration in Florida and Texas,” the agency said in a press release.

The outlook is stable. S&P said it sees WPG prudently using free cash flow to meet covenants, with incoming cash flows to ensure fixed-charge coverage ratio of 1.5x-2x and debt to EBITDA of 7x-8x over the next year or two.

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