Moody’s could raise Metrovacesa

Moody's Investors Service said it placed Metrovacesa SA's Baa3 long-term issuer rating on review for upgrade following the June 21 announcement that the company agreed to merge into Merlin Properties Socimi, SA (unrated).

"We have placed the Baa3 rating of Metrovacesa on review for upgrade because the merger of Metrovacesa's commercial real estate assets with Merlin's would create Spain's largest real estate company. If the merger is completed, the combined group would have more than €9 billion of assets, the top position in the office market and the second-largest position in the retail market,” Moody’s senior credit officer Roberto Pozzi said in a news release.

The board of directors of both companies have approved the transaction which, subject to shareholder and regulatory approvals, is expected to close in the last quarter of 2016.

Moody's also placed the provisional Baa3 rating of Metrovacesa's euro medium term note and the Baa3 rating of its senior unsecured notes issued from its euro medium term note program on review for upgrade.

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