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Affirmation of credit rating by GCR and change of credit rating by Moody’s
FORTRESS REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2009/016487/06)
JSE share codes: FFA ISIN: ZAE000248498
FFB ISIN: ZAE000248506
Bond Company code: FORI
(Approved as a REIT by the JSE)
("Fortress" and "the Company")
AFFIRMATION OF CREDIT RATING BY GCR AND CHANGE OF CREDIT RATING BY MOODY'S
Security holders are advised that Global Credit Ratings Company Limited ("GCR") on 1 April 2019 affirmed the
Company's national scale issuer rating at AA-(ZA) and A1+(ZA) for the long-term and short-term respectively; with a
stable outlook. GCR's full report is available online at https://globalratings.net/news/article/gcr-affirms-fortress-reit-
limiteds-rating-at-aa-za-stable-outlook1
Security holders are further advised that Moody's Investor Services Inc ("Moody's") has downgraded Fortress' long-
term Baa3 issuer rating to a corporate family rating ("CFR") of Ba1 as well as the short-term rating to Not Prime from
Prime-3 (P-3). Concurrently, Moody's has assigned a long-term CFR national scale rating of Aa3.za and has withdrawn
Fortress' long-term Aa1.za national scale issuer rating, whilst it has affirmed the short-term national scale rating of
Prime-1.za. Moody's rating outlook is negative. The full report is available online at
https://www.moodys.com/research/Moodys-downgrades-Fortress-REIT-Limited-to-Ba1Aa3za-outlook-negative--PR_399150
In its report, Moody's bases its re-rating on the view that investor sentiment is negative in respect of the ongoing
Financial Sector Conduct Authority ("FSCA") investigation relating to trading in Fortress shares in 2017-2018,
notwithstanding that the FSCA has publicly stated that the investigation is not into the affairs of Fortress, but into trading
in Fortress shares and that the FSCA has closed its investigation relating to the possibility of insider trading in Fortress
shares.
Moody's is of the view that the ongoing FSCA investigation will curtail Fortress' access to the capital markets. This
view, coupled with Moody's approach to assessing liquidity, which includes Fortress' ability to meet its funding
requirements on the assumption that it will not have access to any new funding over the next 12 months, results in
Moody's concluding that Fortress would not have sufficient cash and undrawn credit lines to cover upcoming debt
repayments, on the assumption that no maturing debt is refinanced.
Fortress is of the view that Moody's approach is excessively conservative given that Fortress has successfully refinanced
all bank debt maturing in the last 12 months, to the value of R 2.46 billion, and has raised new secured facilities of
R1.92 billion, R450 million of which will be applied in redeeming bonds maturing in May and June 2019. Moody's has
noted Fortress' successful refinancing of matured bank debt and its solid access to a diversified group of local banks.
Moody's negative outlook reflects the risks related to the refinancing of debt becoming due in the next 12 months.
24 April 2019
Debt sponsor Lead sponsor Joint sponsor
RAND MERCHANT BANK Java Capital Nedbank Corporate and Investment Banking
(A division of FirstRand Bank Limited)
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