S&P lowers O1 Properties

S&P said it lowered the long-term issuer credit rating on O1 Properties Ltd. to B from B+.

The outlook is negative.

The agency also said it lowered the ratings on the notes issued by O1 Properties Finance plc and O1 Properties Finance JSC to B- from B.

The downgrades follow the company's proposal to restructure its two local bonds and an assessment that its liability management is turning more aggressive, S&P said.

The action also considers the fact that O1 Properties' parent company, O1 Group, is engaged in a series of legal actions initiated by one of its nationalized banking creditors, Bank Otkritie Financial Co., creating an extra layer of uncertainty for the company, the agency explained.

O1 Properties is proposing to extend the maturity of its $150 million bond by three years and its $335 million bond by five years, S&P said.

The company also is proposing to change the bonds' currency to euros from dollars and to change the fixed rate to a floating index, the agency noted.

The proposed restructuring is considered opportunistic and not distressed as it takes place three years before the existing maturity dates, S&P said.

There is no reduction in par value, the agency said, and proposed offer is close to the original amount promised, providing bondholders with economic parity.

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