Johannesburg, 16 May 2013 — Global Credit Ratings has today accorded a final, public long term ‘A(ZA)(sf)’ rating with a “Stable’ Outlook, to the R150m Senior Secured Notes to be issued by Hospitality Property Fund Limited.
Global Credit Ratings has accorded the above credit rating(s) on Hospitality Property Fund Limited Senior Secured Notes based on the following key criteria:
The Senior Secured Notes were issued under the Issuer’s R2bn DMTN Programme arranged by Rand Merchant Bank (‘RMB’). The rating of the Senior Secured Notes was derived by applying a notching up approach, starting from the long term senior unsecured corporate credit rating of the Issuer. Based on fundamentals and prospects of the Issuer, GCR has accorded a long term ‘BBB-(ZA)’ national scale corporate credit rating to the Issuer. A rating uplift of 4 national scale notches was deemed appropriate in this particular transaction, given the “Excellent Recovery Prospects ” equating to a ‘A(ZA)(sf)’ rating on the transaction. The rating accorded to the Senior Secured Secured Notes relates to ultimate payment of the principal. If the ratings accorded to the Issuer change, the rating of the Senior Secured Notes may also change, but potentially not on the same scale. The rating excludes an assessment of the Issuer to pay any (early repayment) penalties. GCR analysed the transaction by applying its Global Structured Finance Rating Criteria and its Global Structurally Enhanced Corporate Bonds Rating Criteria. For more information on the Hospitality Property Fund R150m Issuance, please read GCR’s New Issuance Report on this programme issued in May 2013.
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Head of Sector: Structured Finance
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APPLICABLE METHODOLOGIES AND RELATED RESEARCH
Global Structured Finance Rating Criteria
Global Structurally Enhanced Corporate Bonds Rating Criteria
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GCR affirms that a.) no part of the rating was influenced by any other business activities of the credit rating agency; b.) the rating was based solely on the merits of the rated entity, security or financial instrument being rated; c.) such rating was an independent evaluation of the risks and merits of the rated entity, security or financial instrument; and d.) the validity of the rating is for a maximum of 12 months, or earlier as indicated by the applicable credit rating document.
Hospitality Property Fund Limited participated in the rating process via face-to-face management meetings, teleconferences and other written correspondence. Furthermore, the quality of info received was considered adequate and has been independently verified where possible.
The credit rating/s has been disclosed to Hospitality Property Fund Limited with no contestation of the rating.
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