Moody's announces Redefine's credit rating

Redefine is well positioned to access alternative unsecured funding markets such as corporate bonds cost effectively, following the announcement of the company’s credit rating assessment by Moody’s.

Redefine Financial Director, Andrew Konig, says the company is pleased with the outcome of the first time credit rating from Moody’s, which classifies Redefine as “investment grade with a stable outlook” on a global and national scale, and ranks the company amongst the likes of AngloGold Ashanti, Gold Fields, Growthpoint Properties, MTN Group and Naspers on the global rating.

Moody’s assigned a global long-term and short-term Issuer and Senior Unsecured Ratings of Baa3 and Prime-3 (P-3) to Redefine. Concurrently, Moody’s has also assigned long-term and short-term National Scale Ratings of A3.za and Prime-2.za (P-2.za).

The outlook on the ratings is stable. Moody’s defines obligations rated Baa as subject to moderate credit risk, and are considered medium grade and as such may possess certain speculative characteristics.

Moody’s says the ratings are underpinned by Redefine’s large portfolio of predominantly South African properties with a good occupancy rate that produces very high margins with relatively low volatility compared to its global peers.

The company has developed a diversified offshore property exposure via its subsidiary Redefine Properties International Ltd, with property investments in the UK, Germany, Switzerland and Australia.

The ratings also incorporate relatively strong credit metrics and the ratings are supported by the company’s recurring, contractual rental income.

Furthermore, the company’s approach to development risk is conservative, with no more than 5% of the total property portfolio’s assets representing developments at any one time.

The stable outlook reflects Moody’s view that the South African economy is emerging from recession and the property sector continues to improve.

Moody’s believes that Redefine will continue to produce steady rental income, make well-conceived investments and produce good operating returns.