S&P rates El Corte Ingles notes BBB-

S&P said it assigned its BBB- rating to the proposed €400 million of notes issued by El Corte Ingles.

“We based the BBB- rating on ECI’s bonds, one notch higher than the issuer credit rating, on its high real estate ownership. This is because of the strong asset coverage ensured by the material real estate ECI owns. We also note ECI may create an operating subsidiary to which it will contribute a moderate part of its nonretail real estate to develop and could raise some debt at that level. The rating on the notes is one notch higher because we expect that the asset contribution to this 100%-owned subsidiary and any debt raised at that subsidiary level will be very moderate, thereby not affecting the recovery prospects of the rated instrument,” S&P said in a press release.

The BB+ long-term issuer credit rating and the negative outlook on the group and the issue and recovery ratings on its debt are unchanged, S&P said.

Proceeds will be used for general business purposes, including repayment and pre-funding of debt as and when maturities come due.

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