S&P rates Akelius hybrids BB+

S&P said it assigned a BB+ long-term issue rating to the proposed deferrable subordinated hybrid notes to be issued by Akelius Residential Property AB.

The completion and size of the transaction will be subject to market conditions, but the agency said it anticipates that it will reach up to the benchmark size of about €500 million.

Akelius plans to use the proceeds to fund the company's growth and cover refinancing needs, the agency said.

The proposed notes are considered as having intermediate equity content until their first call date in 2024, because they meet the criteria in terms of subordination, permanence and optional deferability during this period, the agency said.

S&P said it arrived at the BB+ rating on the proposed notes by deducting two notches from the company's BBB issuer credit rating.

The agency said it deducts one notch for the subordination of the proposed notes because the issuer credit rating on Akelius is investment grade and additional deduction for payment flexibility to reflect that the deferral of interest is optional.

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