S&P rates Starhill Global REIT notes BBB+/axA+

S&P said it assigned its BBB+ long-term issue rating and axA+ long-term Asean regional scale rating to a proposed S$70 million issue of senior unsecured notes that Starhill Global Real Estate Investment Trust (BBB+/stable/--; axA+/--) guarantees.

Starhill Global REIT MTN Pte Ltd., a wholly owned subsidiary of Starhill Global REIT, will issue the notes under its S$2 billion medium-term note program.

The issue rating is the same as the corporate credit rating on Starhill Global REIT because the REIT's total secured debt is below the agency’s notching threshold of 20% of total assets, S&P said.

Moreover, the contribution of net operating income from encumbered assets is less than S&P’s notching threshold of 50% of total net operating income.

Starhill Global REIT expects to use about S$55 million of the note proceeds to refinance existing debt and the rest of the funds (S$15 million) for capital expenditure including asset-enhancement initiatives, and for working capital purposes.

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