Moody’s cuts Citycon

Moody’s Investors Service said it lowered Citycon OYJ’s junior subordinated notes to Ba3 from Ba2, the backed senior unsecured MTN program to (P)Ba1 from (P)Baa3 and the backed senior unsecured bonds to Ba1 from Baa3 of Citycon Treasury BV.

“The downgrade reflects a number of factors that resulted in a weaker credit profile of Citycon. Citycon's fixed charge cover is below the level required for the current rating at around 2.2x as of Q1 LTM 2023 assuming the hybrids are treated as debt, and proportional consolidation of Kista (2.7x if hybrid bonds would still have 50% equity content), and will remain so, given the continued challenging capital market conditions with rapidly increasing interest rates and high credit spreads,” Moody’s said in a press release.

On the positive side, “Citycon has no material refinancing risk until Q4 2024 and the company has addressed refinancing risk and used the proceeds from divestments to repurchase hybrid bond call date and the bond maturing in October 2024 issued by Citycon Treasury BV. It has also reverted to secured borrowing and Citycon has obtained a new revolving credit facility of € 400 million (replacing an older €500 million facility) and a new term-loan of €250 million,” Moody’s said.

The outlook remains negative.

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