This is the second time in six months that S&P has raised its rating of CBRE. S&P took its latest action under its revised methodology for evaluating non-bank financial services companies. In its most recent analysis (June 2014) of CBRE, S&P cited more conservative financial management and an increase in contractual revenue as reasons for its improved credit profile.
CBRE has recently undertaken several financing activities to strengthen its balance sheet and provide increased financial flexibility. Since early last year, CBRE has issued approximately US$1.2 billion of senior notes, at 10-year or longer terms and at interest rates of 5.25% or lower. This includes US$125 million of additional 5.25% senior notes due 2025 issued earlier today at 101.5% of their face value. Proceeds from CBRE’s prior notes issuances were used to redeem shorter-maturity notes and to prepay floating-rate debt. Proceeds from today’s notes issuance are intended to be used to prepay floating-rate term loans.
CBRE also announced in late November that it is in discussions with its existing credit-facility lenders to increase its revolving credit facility to up to US$2.5 billion (US$149.2 million balance at 9/30/14) and refinance its existing Tranche A term loan (US$443.7 million balance at 9/30/14) with a new US$500 million Tranche A term loan.
“The S&P upgrade is a milestone for CBRE,” said Jim Groch, CBRE’s chief financial officer and global director of corporate development. “We continue to thoughtfully manage our balance sheet while investing in our people and platform. Combining the industry’s top entrepreneurial talent with contractual client relationships and integrated services allows us to create value for our clients and extend our competitive advantage in the market.”
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2014 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
