S&P rates Majid Al-Futtaim securities BB+

S&P said it assigned its BB+ issue rating to the proposed, optionally deferrable and junior subordinated hybrid capital securities to be issued by Majid Al-Futtaim Holding LLC (BBB/stable/A-2) through MAF Global Securities Ltd., which is its fully owned financial subsidiary, and unconditionally and irrevocably guaranteed on a joint and several basis by Majid Al-Futtaim and Majid Al Futtaim Properties LLC.

The instruments are perpetual.

The agency said the transaction currency will be U.S. dollars and the volume of the hybrid capital securities is subject to market conditions, but will not exceed 15% of the MAF group's S&P-adjusted capitalization, including the $500 million perpetual notes issued in May 2013.

Proceeds will be used for general corporate purposes.

S&P said it arrives at the BB+ issue rating on the proposed hybrid capital securities by notching down from Majid Al-Futtaim’s BBB long-term corporate credit rating. The two-notch differential reflects that the agency deducts: (a) One notch for subordination because the corporate credit rating is investment-grade; and (b) one notch for payment flexibility to reflect the fact that the deferral of interest is optional and that the corporate credit rating is investment-grade.

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