Fitch may cut Westfield

Fitch Ratings said it placed the Westfield Group's long-term issuer default rating and senior ratings of A- on Rating Watch negative.

The watch follows news that Westfield is proposing a restructure that will result in the establishment of a newly listed entity, Westfield Retail Trust, through the distribution of existing Westfield Group capital, Fitch said.

The effect of this transaction is to remove A$12.2 billion of high quality assets with a current occupancy of greater than 99.5% and have seen consistently high levels of occupancy and rising incomes over recent years, even through a period of heightened economic volatility, the agency said.

These assets represent a significant portion of Westfield's assets and EBITDA capacity, Fitch said.

This restructure represents a significant loss of quality assets and stable income from Westfield's balance sheet, the agency said, and it appears that Westfield is readying itself for expansion opportunities, should they arise.

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