S&P ups Merlin Properties view to positive

S&P said it revised its outlook for Merlin Properties Socimi SA to positive from stable and affirmed its BBB ratings.

Merlin plans to sell its net lease portfolio for about €2 billion and use most of the proceeds to strengthen its balance sheet.

“The about €2 billion disposal to BBVA, its current tenant, will imply a reduction in Merlin's S&P Global Ratings-adjusted net debt to about €3.6 billion from €5.3 billion at Dec. 31, 2021. The transaction will close in June 2022, and we expect minimal execution risk,” S&P said in a press release.

The company is expected to distribute an exceptional dividend of about €315 million in compliance with the 50% capital gains Socimi (Spanish REIT status) regime distribution requirement. The remaining €1.7 billion will be added to the balance sheet, including the cancellation of the mortgage loan and derivatives associated with the net lease portfolio for about €700 million and other debt facilities for about €850 million.

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