This article is from the Australian Property Journal archive
RATINGS agency Standard & Poors' has lowered the ratings on seven tranches commercial backed securities issued by Centro Shopping Centre.
S&P said the downgrades reflect a potential increase in senior ranking liabilities that may be incurred by one of the borrowers in the transaction, Centro Retail Trust.
“We have recently been notified that CER had entered into swaps with BNP Paribas (AA/Negative/A-1+) to replace pre-existing interest rate swaps attached to two of the underlying obligations between CER and Centro Property Trust.
“We have concerns that the contingent costs associated with the new swaps could ultimately reduce the cash available to noteholders,” Standard & Poor’s credit analyst Narelle Coneybeare said.
“This, in our opinion, may weaken the credit quality of the rated cash flows, particularly given the broader challenges facing the transaction, including the pressure on managing the collateral portfolio, asset performance, recently reported valuation reductions, and generally weaker conditions in Australian property markets,” she added.
RATINGS LOWERED
Centro Shopping Centre Securities Ltd. CMBS Series 2006-1
Class Rating to Rating from
A-1 AA AAA
A-2 AA AAA
A-3 AA AAA
B A+ AA
C BBB+ A
D BB+ BBB
E BB BBB-
Australian Property Journal
