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TEXT-Fitch rates British Land proposed convertible bonds
September 4, 2012 / 2:20 PM / 5 years ago

TEXT-Fitch rates British Land proposed convertible bonds

Sept 4 - Fitch Ratings has assigned British Land Company Plc's 
(British Land) prospective GBP300m five-year convertible bond an expected
'A-(EXP)' rating. The expected rating is in line with British Land's senior
unsecured 'A-' rating. British Land's Issuer Default Rating (IDR) is 'BBB+' with
a Stable Outlook. 

The convertible bond will be used to continue British Land's strategy of 
diversifying funding sources and enhancing an already strong liquidity and debt 
profile position. The convertible bond is senior unsecured, benefits from a 
British Land Company Plc guarantee and mirrors the covenant structure of British
Land's other senior unsecured debt. 

This new instrument is classified as a hybrid, and as such the rating assigned 
is based on Fitch's respective criteria. Key features of the instrument are the 
presence of optionality, and restriction that only holders of the convertible 
can exercise the conversion right. Consequently, Fitch treats this instrument 
for its pre-conversion characteristics, notably senior unsecured debt.  

The final rating is contingent upon the receipt of final documentation 
conforming to information already received by the agency.

British Land continues to maintain strong financial metrics. Fitch-adjusted 
group leverage (including equity in joint ventures) was stable at 30% at March 
2012, despite the challenging UK retail property environment. Its liquidity 
position remains one of the strongest in the EMEA REIT sector. The ratings also 
reflect the company's strong lease profile (average 11.3 years to first break) 
which is above average for the sector, and excellent tenant profile, which gives
sound defensive qualities in a property downturn.Additional information is available at

The ratings above were solicited by, or on behalf of, the issuer, and therefore,
Fitch has been compensated for the provision of the ratings.

Applicable criteria, 'Corporate Rating Methodology', dated 12 August 2012, and 
'Treatment and Notching of Hybrids in Non-Financial Corporate and REIT Credit 
Analysis', dated 15 December is available at

Applicable Criteria and

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