Fitch might lower Hammerson

Fitch Ratings said it placed Hammerson plc’s long-term issuer default rating of BBB+ on rating watch negative, along with the senior unsecured rating of A-.

The action follows the recent announcement that the company will acquire Intu Properties plc.

Under the terms of the all-share transaction, Intu shareholders will receive 0.475 of new Hammerson shares for each existing Intu share held. Hammerson's shareholders will ultimately own 55% of the merged entity, with Intu's shareholders owning the remaining 45%.

“While Fitch believes the potential strategic benefits associated with the combination of these companies are significant, the rating action reflects Fitch's concerns the acquisition may cause the combined company's financial leverage metrics to deteriorate to a level more commensurate with a lower rating,” the agency said in a news release.

“In addition, the combined capital structure is expected to include a significantly higher proportion of secured debt, which may limit contingent liquidity and may impact recovery prospects for unsecured debt negatively.”

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