GIBRALTAR--(EON: Enhanced Online News)--Luxury resort hospitality company The Resort Group plc (TRG) said today that ARC Ratings, S.A. (ARC Ratings) has accorded a corporate ‘BBB’ - issuer medium and long-term rating with a Stable outlook to the Group, as it completes the opening of its latest five-star resort and beach club in Cape Verde. ARC Ratings, who recently received full European Commission Credit Rating Agency accreditation, said the investment grade rating was based on TRG’s strong business model, partnerships with strong international hotel brands and low leverage.
“Audley Funding Series CI1 6% Listed Notes”
ARC has also accorded a ‘BBB+’ rating with a Stable outlook to the secured notes programme issued by Escher Marwick PLC under the series known as “Escher Marwick Series 2016-4 Listed Notes” and to Audley Funding PLC under the series known as “Audley Funding Series CI1 6% Listed Notes”. Both of these exchange-traded products (ETPs) securitise note holders by acquiring interests in hotel rooms, suites and apartments from TRG in Cape Verde. The ETPs are listed on the General Exchange Market of the Irish Stock Exchange and the Channel Islands Securities Exchange, both with secondary listings on the Frankfurt Stock Exchange. It was noted that these enhanced ratings were due in part to the significant recovery position of the aforementioned listed notes brought about by the underlying commercial strength of The Resort Group plc.
The European Commission in October 2016 announced the approval and publication of ARC’s ratings mapping tables, according ARC the same mapping for its ratings as the ‘big three’ credit ratings agencies (CRAs). As a result, ARC’s ratings can be used for capital relief purposes under the standardised and ratings based approach, as well as under Solvency II.
Rob Jarrett, CEO of The Resort Group, said: “These investment-grade credit ratings validate the strength of our business model and our ability to meet the needs of leading international hotel brands and tour operators in a comprehensive and forward-looking manner. TRG has the largest resort and hotel pipeline in Cape Verde, an increasingly important tourist destination. We are excited about the future and our continued growth as a world class luxury resort hospitality company.”
ARC said TRG’s strong business model of working with several partners allows the Group to reduce its risks and also cited its ability to attract strong international hotel brands operators to its hotels and resorts: presently the Meliá, Sensimar (TUI Group) and Hilton brands. TRG also benefits from guaranteed occupancy by an international tour operator for hotels and resorts operated by Meliá and TUI groups as well as low leverage, the agency said.
The World Travel & Tourism Council expects Cape Verde tourism to grow significantly over the next 10 years, contributing just under 50% of the country’s GDP by 2025. TRG currently accounts for 39.2% of the five-star resort segment in Cape Verde. Following the launch of MELIÃ Llana Beach / Sensimar resort in December 2016, the group will increase its market share of this segment to 46.9%.
With a proven track record of returns, uncorrelated with equity and bond markets, the now ‘investment grade’ ETPs are eligible for inclusion across a variety of investment strategies, including equity ISAs, Self-invested Pensions, Portfolio Bonds, UCITS structures and traditional managed funds.
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