The latest information on the rating, including rating reports and related methodologies, is available on this LINK.

Rating action

Scope Ratings GmbH (Scope) has assigned a (P) BBB rating to Norwegian Property ASA's planned senior secured bond(s). Scope has taken no action on Norwegian Property ASA's BBB-/Negative issuer rating.

Rating rationale

Norwegian Property plans to issue a senior secured bond up to NOK 989m in the near future to refinance the NOK 500m 2017/2024 NPRO 07 bond (ISIN NO0010794241) and the NOK 450m 2017/2024 NPRO 08 bond (ISIN NO0010794258). The company intends to respond to market interest by offering three, five and seven-year tenors up to a combined maximum amount of 65% of the provided collateral (Fondbygget, which was valued by Cushman & Wakefield at NOK 1,523m as of Q1 2024). The coupon will be payable quarterly/annual in arrears. Final pricing will be determined in the bookbuilding process. All bonds (if there are several) and bondholders will rank pari passu, Norwegian Property's standard intercreditor agreement will govern the treatment of creditors. Nordic Trustee will be appointed as trustee. A change of control put option will be built into the documentation as well as a maximum loan/value of 65% (incurrence) on the collateral. The bonds will be listed on the Oslo Stock Exchange.

The senior secured bond(s) is assigned a (P) BBB rating, based on the underlying issuer rating of BBB-/Negative. The Senior Secured Notes benefit from a first-ranking pledge on the property Fondbygget in the central business district Aker Brygge in Oslo and, in the event of a hypothetical default, additional pro rata proceeds from any liquidation proceeds, which in such event would be distributed pari passu among all holders of senior secured debt.

Stress testing & cash flow analysis
No stress testing was performed. Scope Ratings performed its standard cash flow forecasting for the company.

Methodology
The methodologies used for this Credit Rating, (European Real Estate Rating Methodology, 28 March 2024; General Corporate Rating Methodology, 16 October 2023), are available on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
Information on the meaning of each Credit Rating category, including definitions of default, recoveries, Outlooks and Under Review, can be viewed in 'Rating Definitions – Credit Ratings, Ancillary and Other Services', published on https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Historical default rates of the entities rated by Scope Ratings can be viewed in the Credit Rating performance report at https://scoperatings.com/governance-and-policies/regulatory/eu-regulation. Also refer to the central platform (CEREP) of the European Securities and Markets Authority (ESMA): http://cerep.esma.europa.eu/cerep-web/statistics/defaults.xhtml. A comprehensive clarification of Scope Ratings' definitions of default and Credit Rating notations can be found at https://www.scoperatings.com/governance-and-policies/rating-governance/definitions-and-scales. Guidance and information on how environmental, social or governance factors (ESG factors) are incorporated into the Credit Rating can be found in the respective sections of the methodologies or guidance documents provided on https://scoperatings.com/governance-and-policies/rating-governance/methodologies.
The Outlook indicates the most likely direction of the Credit Rating if the Credit Rating was to change within the next 12 to 18 months.

Solicitation, key sources and quality of information
The Rated Entity and/or its Related Third Parties participated in the Credit Rating process.
The following substantially material sources of information were used to prepare the Credit Rating: public domain, the Rated Entity, third parties and Scope Ratings' internal sources.
Scope Ratings considers the quality of information available to Scope Ratings on the Rated Entity or instrument to be satisfactory. The information and data supporting the Credit Rating originate from sources Scope Ratings considers to be reliable and accurate. Scope Ratings does not, however, independently verify the reliability and accuracy of the information and data.
Prior to the issuance of the Credit Rating action, the Rated Entity was given the opportunity to review the Credit Rating and the principal grounds on which the Credit Rating are based. Following that review, the Credit Rating was not amended before being issued.

Regulatory disclosures
This Credit Rating is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0. The Credit Rating is UK-endorsed.
Lead analyst: Thomas Faeh, Executive Director
Person responsible for approval of the Credit Rating: Philipp Wass, Managing Director
The Credit Rating was first released by Scope Ratings on 27 May 2024.

Potential conflicts
See www.scoperatings.com under Governance & Policies/Regulatory for a list of potential conflicts of interest disclosures related to the issuance of Credit Ratings.

Conditions of use/exclusion of liability
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