articles Ratings /ratings/en/research/articles/210930-sgs-finance-plc-cmbs-notes-ratings-withdrawn-principal-only-ratings-assigned-12127861 content esgSubNav
In This List
NEWS

SGS Finance PLC CMBS Notes Ratings Withdrawn; Principal-Only Ratings Assigned

COMMENTS

U.S. BSL CLO Obligors: Corporate Rating Actions Tracker 2025 (As Of April 25)

COMMENTS

European CMBS Monitor Q1 2025

COMMENTS

SF Credit Brief: CLO Insights 2025 U.S. BSL Index: Loan Price Volatility Highlights Tariff-Affected Sectors; CLO Metrics Stable Except For Loan Prices

COMMENTS

Tender Option Bond Update Q1 2025: What Tariffs Mean For Muni Securitization


SGS Finance PLC CMBS Notes Ratings Withdrawn; Principal-Only Ratings Assigned

Overview

  • We have reviewed SGS Finance in light of a change of the notes' terms.
  • Following our review, we have withdrawn our ratings on all series of notes.
  • At the issuer's request, we have subsequently assigned a principal-only rating based on the notes' new terms, resulting in a 'CCCp (sf)' rating.
  • SGS Finance is a CMBS transaction that closed in March 2013, followed by a tap issuance in November 2014. The transaction is secured by four shopping centers located in the U.K.

LONDON (S&P Global Ratings) Sept. 30, 2021--S&P Global Ratings today withdrew its credit ratings on SGS Finance PLC's series 1, 2, and 3 notes, following which we assigned 'CCCp (sf)' ratings to the same notes based on their new terms.

The issuer has requested a principal-only rating on the series of notes as the new terms and conditions do not require interest on the notes to be paid in a timely manner. We have reviewed the transaction based on this request.

In June 2021, a new valuation was issued with a total market value of £709.7 million for the four underlying properties, compared to £1,275 million in June 2020 and £753.5 million in December 2020. As a result, the loan-to-value ratio has increased to over 200%.

Therefore, in our analysis, the notes did not pass our 'B' rating level stresses. Therefore, we applied our 'CCC' criteria to assess if either a rating in the 'B-' or 'CCC' category would be appropriate (see "Related Criteria"). According to our 'CCC' criteria, for structured finance issues, expected collateral performance and the level of credit enhancement are the primary factors in our assessment of the degree of financial stress and likelihood of default. We performed a qualitative assessment of the key variables, together with an analysis of performance and market data, and we now consider repayment of the notes to be dependent upon favorable business, financial, and economic conditions and that it faces at least a one-in-two likelihood of default.

Counterparty, operational, and legal risks are commensurate with the ratings on the notes under our relevant criteria (see "Related Criteria").

SGS Finance is a debt platform with the flexibility to raise various debt types secured on ring-fenced collateral. The borrower in the transaction uses the proceeds of its financing activities (whether through borrowing from the issuer or through other forms of third-party debt) to make loans to asset-owning companies within the security group (consisting of the obligors and the borrower). The notes are secured by four shopping centers located throughout the U.K.: Lakeside, Braehead, Watford, and Victoria Centre in Nottingham. Our ratings on this transaction address the payment of principal no later than the legal final maturity dates, which are between March 2028 (series 1) and September 2035 (series 3).

Related Criteria

Related Research

Primary Credit Analyst:Carla N Powell, London + 44 20 7176 3982;
carla.powell@spglobal.com
Secondary Contact:Mathias Herzog, Frankfurt + 49 693 399 9112;
mathias.herzog@spglobal.com

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@spglobal.com.


 

Create a free account to unlock the article.

Gain access to exclusive research, events and more.

Already have an account?    Sign in