Statement re credit rating agencies

Canary Wharf Finance II drops Fitch, retaining only S&P and Moody’s ratings on key debt.

What the company is saying

Canary Wharf Finance II plc has formally notified noteholders that it is discontinuing Fitch Ratings Ltd. as an external credit rating agency for its mortgage debentures. The company frames this as a cost and resource-driven decision, stating the move follows an internal review of the demands involved in supporting a third rating. The announcement lists all affected securities, specifying coupon rates and maturities for each class of debenture. The issuer asserts that ratings coverage will continue via S&P Global Rating Europe Limited and Moody's Investor Services Limited, but does not provide any assurance or evidence regarding the current or future status of those ratings. The tone is strictly administrative, with no attempt to present the change as a strategic improvement or to highlight any anticipated benefit to investors. Contact information for the company secretary, Justin Turner, is provided for queries, but no further context or financial impact is discussed.

What the data suggests

The announcement confirms that Fitch Ratings Ltd. will no longer provide ratings on the company’s mortgage debentures, with the decision attributed to internal cost and resource considerations. The affected securities are detailed: Class A1 6.455% Fixed Rate First Mortgage Debentures due 2033, Class A3 5.952% Fixed Rate First Mortgage Debentures due 2037, and Class B 6.800% Fixed Rate First Mortgage Debentures due 2033, among others. No financial results, balance sheet data, or market impact analysis is disclosed. The only hard numbers are the coupon rates and maturities of the debentures. The company claims that S&P and Moody’s coverage will continue, but provides no documentation or confirmation of current ratings status. There is no evidence presented regarding the effect of this change on debt pricing, liquidity, or investor demand. The disclosure is operationally complete regarding the agency change, but omits any quantitative assessment of financial or market consequences.

Analysis

The announcement is a factual update regarding the discontinuation of Fitch Ratings Ltd. as a credit rating agency for several classes of mortgage debentures. The language is straightforward and administrative, with no promotional or exaggerated claims. Only one statement is forward-looking ('will continue to maintain its ratings coverage from S&P Global Rating Europe Limited and Moody's Investor Services Limited'), while the rest are realised actions. There is no discussion of future benefits, capital outlay, or financial impact, and no attempt to frame the change as a strategic or value-enhancing move. The rationale provided is operational (resource demands and costs), not aspirational. No hype or narrative inflation is present.

Risk flags

• ●Reducing the number of credit ratings from three to two may limit investor confidence or restrict access to certain institutional buyers that require multiple ratings, potentially affecting liquidity or pricing for the affected notes.
• ●The company does not disclose any analysis of the potential impact on the marketability of its debentures, leaving investors without information on whether the change could influence trading volumes, spreads, or refinancing options.
• ●No confirmation or evidence is provided regarding the current status or outlook of S&P and Moody’s ratings, introducing uncertainty about the ongoing credit profile and external validation of the issuer’s debt.

Bottom line

Canary Wharf Finance II plc’s decision to discontinue Fitch as a rating agency for its mortgage debentures is an operational cost-saving move, not a strategic repositioning. Investors now rely solely on S&P and Moody’s for independent credit assessments, which may reduce the breadth of external validation and could impact certain investors’ ability to hold or trade the notes. The company provides no quantitative analysis of potential market effects, cost savings, or changes in debt demand. Without confirmation of current ratings from S&P or Moody’s, there is a risk that the credit profile could change without timely disclosure. Investors should be aware that the reduction in ratings coverage may affect liquidity and pricing, and should monitor for any subsequent updates on ratings actions or market response. The most important takeaway is that the company has chosen administrative efficiency over maintaining the broadest possible ratings coverage, with unknown implications for the affected securities.

Announcement summary

(LSE/AIM:31PE) Canary Wharf Finance II plc has notified Fitch Ratings Ltd. that it has discontinued the engagement of Fitch as one of its external credit rating agencies providing ratings on the Notes. The discontinuance follows an internal review of the resource demands and costs involved in supporting a third rating. Canary Wharf Finance II plc will continue to maintain its ratings coverage from S&P Global Rating Europe Limited and Moody's Investor Services Limited. The affected Notes include Class A1 6.455% Fixed Rate First Mortgage Debentures due 2033 (ISIN: XS0112279616), Class A3 5.952% Fixed Rate First Mortgage Debentures due 2037 (ISIN: XS0130681512), Class A7 Floating Rate First Mortgage Debentures due 2037 (ISIN: XS0295171341), Class B 6.800% Fixed Rate First Mortgage Debentures due 2033 (ISIN: XS0112281190), Class B3 Floating Rate First Mortgage Debentures due 2037 (ISIN: XS0295172075), Class C2 Floating Rate First Mortgage Debentures due 2037 (ISIN: XS0295172406), and Class D2 Floating Rate First Mortgage Debentures due 2037 (ISIN: XS0295172745).

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