Colonial, the first Spanish real estate company to obtain BBB+ credit rating

02/01/2019

Colonial, the first Spanish real estate company to obtain BBB+ credit rating

The rating agency Standard & Poor´s (S&P) has confirmed Colonial´s long-term credit rating as BBB+ with stable outlook following the acquisition of a 22,2% stake in Societé Foncière Lyonnaise (SFL) from QIA, increasing its stake from 59% to 81%, but also due to the prime CBD location of its asset portfolio, in markets with strong fundamentals. Thus, Colonial has become the first Spanish real estate company to obtain this rating.

Among Colonial’s Prime Factory offices buildings located in Madrid’s CBD stand out José Abascal 56Castellana 43Discovery Building and The Window Building. These last two buildings share common elements such a signature’s architecture, the avantgarde materials from which they are made or their orientation towards the care of their users. These buildings’ floors are versatile, and they also share excellent communications and services location. Both buildings have been designed and projected to achieve the highest sustainability certification. In particular, the Discovery Building is the first new construction office building to obtain LEED Platinum sustainability certificate within the M-30 area.

In May 2015, Colonial became the first Spanish quoted company to receive a Standard and Poor’s Investment Grade qualification. At the time, the rating agency granted Colonial a BBB- credit rating. In April 2017, S&P increased Colonial’s rating to BBB with a stable outlook due to the positive business evolution, as well as the Group’s improved financial profile. Other factors such as the prime location of Colonial’s asset portfolio, its leadership in CBD areas, an adequate geographic diversification and the increased demand for office space, along with increases in rental income, also contributed to the rating upgrade.

As of today, 83% of the Colonial Group’s debt is through corporate bonds, amounting to 3,800 million euros. This debt has a total cost of 2%. Following the upgraded rating, the company will be able to access capital markets with a lower cost of debt, which proves Colonial’s financial strength.

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