Moody's gives (P)Baa3 to Phillips Edison

Moody's Investors Service said it gave a (P)Baa3 issuer rating to Phillips Edison Grocery Center Operating Partnership I, LP, the main operating subsidiary of Phillips Edison & Co., Inc. Moody's is rating Phillips Edison for the first time.

“The (P)Baa3 issuer rating for Phillips Edison Grocery Center Operating Partnership I, L.P. incorporates the REIT's status as the largest owner/operator of omni-channel, open-air grocery-anchored shopping centers predominantly tenanted by a mix of strong national and regional essential/necessity-based goods and service providers that have defenses against threats from e-commerce. Post-IPO, the company will have a stronger balance sheet with a more flexible capital structure and an improved liquidity position,” Moody’s said in a press release.

Phillips Edison plans to sell 17 million shares of common stock to the public along with a grant to the underwriters to purchase up to an additional 2.55 million shares of common stock in an IPO.

Management plans to use the proceeds to repay $375 million of near-term debt and for other general corporate purposes.

The IPO launch follows the company closing on a $980 million senior unsecured credit facility, comprising a $500 million revolving credit facility that matures in 2026 with two, six-month extension options. Additionally, there are two separate tranches of unsecured floating-rate term loans, each totaling $240 million, that mature in 2025 and 2026, respectively.

The outlook is stable.

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