S&P rates Majid Al Futtaim's hybrid notes BB+

S&P said it assigned its BB+ issue rating to the proposed junior subordinated hybrid notes to be issued by Dubai-based real estate and retail group Majid Al Futtaim Holding LLC (MAF Holding; BBB/stable/A-2) through its fully owned subsidiary MAF Global Securities Ltd.

The notes will be unconditionally and irrevocably guaranteed – jointly and severally – by MAF Holding and Majid Al Futtaim Properties LLC. The instruments will be perpetual and optionally deferrable.

“We arrive at our BB+ issue rating on the proposed hybrid notes by notching down from our BBB long-term issuer credit rating (ICR) on MAF Holding. The two-notch difference is because we deduct: One notch for subordination because the long-term ICR on MAF Holding is investment grade (that is, BBB- or higher); and one notch for payment flexibility, since the deferral of interest is optional and the ICR is investment grade.”

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