S&P rates Akelius notes BB+

S&P said it assigned its BB+ issue rating to the proposed unsecured subordinated hybrid notes to be issued by Akelius Residential Property AB.

The completion and size of the offering will be subject to market conditions, but S&P anticipates it will be about €500 million. Akelius plans to use the proceeds to repay senior debt and for potential acquisitions.

The proposed hybrid notes have a non-call period from issuance of at least 5 years. The notes are callable thereafter and are optionally deferrable and subordinated.

“We consider that the proposed hybrid notes will meet our criteria to receive intermediate equity content until the first reset date. In line with our hybrid criteria, in our calculation of Akelius's credit ratios we will treat 50% of the principal outstanding under the hybrids as debt rather than equity and will treat 50% of the related payments on these notes as equivalent to interest expense,” said S&P in a press release.

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