Latest news with #creditworthiness
Zawya
04-06-2025
- Business
- Zawya
Simah Rating Agency (Tassnief) assigns 'A-' solicited national scale entity ratings to Arabian Centres Company
Riyadh: Tassnief has assigned long-term national scale entity rating of '(A-)'' (Single A Minus) and short-term entity rating of 'T-3' to Arabian Centres Company ('Cenomi' or 'the Company'). The assigned ratings reflect high creditworthiness, thus low credit risk. Risk profile may exhibit variation due to changes in economic and sector conditions. Rating Rationale: The assigned ratings incorporate Cenomi's leading market position, satisfactory business diversity, strong operating performance supported by high occupancies and footfall growth as well as sound tenant mix comprising renowned local, regional and international brands. Ratings also reflect a favorable operating environment which is expected to support operating performance over the rating horizon. Ratings are constrained by aggressive financial and development policies and weak credit metrics, although improvement in the same is expected when Jawharat Riyadh and Jawharat Jeddah are at full stabilization, generating incremental EBITDA of over SAR 650m. Cenomi has a leading market share of approximately 18% in Gross Leasable Area (GLA), three times that of its nearest competitor, underscoring its scale advantage and operational depth in a fragmented market. Cenomi's market leadership offers strong pricing power, high tenant retention, and resilience to competitive pressures. The Company's competitive advantage and strong operational performance emanates from its high-quality malls' portfolio, having strategic composition and broad geographical footprint, although some revenue concentration is present in tier-A malls. The key business risk factors include i) half of the malls built on leasehold land which expose the Company to lease non-renewal risk, and ii) sizeable lease expiries due in 2025. Tassnief expects revenue loss due to lease expiry risk to remain manageable over the rating horizon, while ongoing expansion will further strengthen its market position and enhance revenue diversity. Moreover, comfort is drawn from strong track-record of client lease renewals and historically high tenant retention. Assessment of financial risk profile reflects aggressive financial and development policies which have resulted in weakening in credit metrics and deterioration in working capital cycle, as evident from cashflow from operations (CFO) having remained consistently lower than Funds Flow from Operations (FFO) over the last 3 years. Full recovery in credit metrics is expected to materialize by 2028 where we expect the full EBITDA impact of Jawahrat Jeddah and Jawahrat Riyadh to be reflected in financials. Tassnief is incorporating improved credit metrics while assigning the current ratings. Both malls are expected to contribute SAR 650m in new cash flows at stabilization. Rating Triggers Negative rating triggers include Any further weakening in FFO-based interest coverages from around current level. Further increase in Net Debt to EBITDAR from the current level of 7.51x. Non-materialization of improvement in FFO-based interest coverages and Net Debt to EBITDAR post-stabilization of Jawahrat Jeddah and Jawahrat Riyadh. Continued deterioration in working capital, resulting in lower CFO generation as compared to FFO. Significant weakening in operating performance through decline in occupancies levels below 90%. Deterioration in operating environment, which Tassnief does not anticipate in its base case scenario. Positive rating triggers include A sustained shift towards a balanced financial policy, resulting in notable improvement in debt and interest coverages. Improvement in occupancies levels above 95% following the stabilization of Jawahrat Jeddah and Jawahrat Riyadh. Improvement in FFO based interest coverages to around 2.75x and Net Debt to EBITDAR to below 5x on a sustainable basis. About the Company: Arabian Centres Company, referred to as "Cenomi" or "the Company", is a Saudi Joint Stock Company registered in the Kingdom of Saudi Arabia under the commercial registration number 1010209177. Cenomi is the largest owner, operator and developer of contemporary lifestyle malls in Saudi Arabia. For further information on this rating announcement, please contact Mr. Talha Iqbal (Ext. 6627) at +966-112506627 or email at RS@ Rating Methodology for Corporate (v.2. 2019) can be found on the website:
CNN
19-05-2025
- Business
- CNN
Why climate risk could affect your credit score for buying a home
Climate change should be considered a new core aspect of creditworthiness when prospective home buyers apply for a mortgage, a new report suggests. The analysis from the climate risk financial modeling firm First Street is a groundbreaking nationwide look at the ties between the growing risks from extreme weather such as floods and wildfires, and a long-suspected spike in mortgage defaults in hard-hit areas. It finds that lenders and borrowers are exposed to more financial risk than they are aware of because current ways of determining creditworthiness leave out exposure to climate disasters as a factor. If climate risk were to be taken into account by lenders — which the analysis shows may be increasingly necessary as climate change worsens the severity and frequency of certain extreme weather events — then the next time someone goes to get a home loan their credit score could be knocked down (or adjusted upward) due to their climate risk exposure. At the same time, mortgage lenders could become more hesitant to provide policies, or raise the cost of borrowing, in certain risky areas with greater exposure to climate-related hazards. First Street finds weather-driven mortgage foreclosures could cause $1.2 billion in lender losses in today's climate, with the majority of that happening in just three states: California, Florida and Louisiana. Over the next decade, this could increase to up to $5.4 billion per year by 2035, which would be about 30% of annual lender losses, the report says. 'This growing share of foreclosure losses is largely driven by the escalating insurance crisis and the increasing frequency and severity of flooding anticipated in the next decade,' the report states. Prev Next It is well-known that the cost of home insurance is increasing in many areas due in part to climate change-driven hazards. This is causing insurance policies to become unaffordable for many people, which exposes them to financial risk from a flood, wildfire or hurricane, for example. It is also prompting insurance companies to flee particularly disaster-prone locations, such as Florida and California. In California, State Farm is raising rates by 17% in one year due in large part to wildfire-related losses. 'When climate events destabilize local housing markets, it doesn't just affect those directly hit,' said Jeremy Porter, head of climate implications for First Street and an author of the report. 'It ripples through the financial system, driving up mortgage rates, directly impacting individual credit risk, and pricing more people out of homeownership,' Porter said. Relying on a combination of peer reviewed methods and new techniques, Porter looked at the number, amount and pattern of foreclosures following wildfire, extreme wind and flooding events nationally. He found the best predictor of rising foreclosure rates among climate-related factors is flooding, particularly when it occurs outside of FEMA flood zones, where homeowners are far less likely to have flood insurance. The study also linked rapid increases in insurance premiums over time at the ZIP code level to increases in foreclosures in those same ZIP codes, finding that insurance increases are putting many families in a more financially vulnerable position and creating greater risks for lenders. Properties flooded in an extreme weather event face a 57% higher foreclosure rate than nearby, unflooded homes, Porter said. One underlying trend used for the study is the rapid increase in costs of natural disasters in the US, as shown in the National Oceanic and Atmospheric Administration's billion-dollar weather and climate disaster database. However, the agency recently announced that due to staffing cuts and shifting priorities, it will no longer update this list, forcing groups like First Street to rethink their methodology and rely on other, potentially inferior datasets.
CNN
19-05-2025
- Business
- CNN
Why climate risk could affect your credit score for buying a home
Climate change should be considered a new core aspect of creditworthiness when prospective home buyers apply for a mortgage, a new report suggests. The analysis from the climate risk financial modeling firm First Street is a groundbreaking nationwide look at the ties between the growing risks from extreme weather such as floods and wildfires, and a long-suspected spike in mortgage defaults in hard-hit areas. It finds that lenders and borrowers are exposed to more financial risk than they are aware of because current ways of determining creditworthiness leave out exposure to climate disasters as a factor. If climate risk were to be taken into account by lenders — which the analysis shows may be increasingly necessary as climate change worsens the severity and frequency of certain extreme weather events — then the next time someone goes to get a home loan their credit score could be knocked down (or adjusted upward) due to their climate risk exposure. At the same time, mortgage lenders could become more hesitant to provide policies, or raise the cost of borrowing, in certain risky areas with greater exposure to climate-related hazards. First Street finds weather-driven mortgage foreclosures could cause $1.2 billion in lender losses in today's climate, with the majority of that happening in just three states: California, Florida and Louisiana. Over the next decade, this could increase to up to $5.4 billion per year by 2035, which would be about 30% of annual lender losses, the report says. 'This growing share of foreclosure losses is largely driven by the escalating insurance crisis and the increasing frequency and severity of flooding anticipated in the next decade,' the report states. Prev Next It is well-known that the cost of home insurance is increasing in many areas due in part to climate change-driven hazards. This is causing insurance policies to become unaffordable for many people, which exposes them to financial risk from a flood, wildfire or hurricane, for example. It is also prompting insurance companies to flee particularly disaster-prone locations, such as Florida and California. In California, State Farm is raising rates by 17% in one year due in large part to wildfire-related losses. 'When climate events destabilize local housing markets, it doesn't just affect those directly hit,' said Jeremy Porter, head of climate implications for First Street and an author of the report. 'It ripples through the financial system, driving up mortgage rates, directly impacting individual credit risk, and pricing more people out of homeownership,' Porter said. Relying on a combination of peer reviewed methods and new techniques, Porter looked at the number, amount and pattern of foreclosures following wildfire, extreme wind and flooding events nationally. He found the best predictor of rising foreclosure rates among climate-related factors is flooding, particularly when it occurs outside of FEMA flood zones, where homeowners are far less likely to have flood insurance. The study also linked rapid increases in insurance premiums over time at the ZIP code level to increases in foreclosures in those same ZIP codes, finding that insurance increases are putting many families in a more financially vulnerable position and creating greater risks for lenders. Properties flooded in an extreme weather event face a 57% higher foreclosure rate than nearby, unflooded homes, Porter said. One underlying trend used for the study is the rapid increase in costs of natural disasters in the US, as shown in the National Oceanic and Atmospheric Administration's billion-dollar weather and climate disaster database. However, the agency recently announced that due to staffing cuts and shifting priorities, it will no longer update this list, forcing groups like First Street to rethink their methodology and rely on other, potentially inferior datasets.
CNN
19-05-2025
- Business
- CNN
Why climate risk could affect your credit score for buying a home
Climate change should be considered a new core aspect of creditworthiness when prospective home buyers apply for a mortgage, a new report suggests. The analysis from the climate risk financial modeling firm First Street is a groundbreaking nationwide look at the ties between the growing risks from extreme weather such as floods and wildfires, and a long-suspected spike in mortgage defaults in hard-hit areas. It finds that lenders and borrowers are exposed to more financial risk than they are aware of because current ways of determining creditworthiness leave out exposure to climate disasters as a factor. If climate risk were to be taken into account by lenders — which the analysis shows may be increasingly necessary as climate change worsens the severity and frequency of certain extreme weather events — then the next time someone goes to get a home loan their credit score could be knocked down (or adjusted upward) due to their climate risk exposure. At the same time, mortgage lenders could become more hesitant to provide policies, or raise the cost of borrowing, in certain risky areas with greater exposure to climate-related hazards. First Street finds weather-driven mortgage foreclosures could cause $1.2 billion in lender losses in today's climate, with the majority of that happening in just three states: California, Florida and Louisiana. Over the next decade, this could increase to up to $5.4 billion per year by 2035, which would be about 30% of annual lender losses, the report says. 'This growing share of foreclosure losses is largely driven by the escalating insurance crisis and the increasing frequency and severity of flooding anticipated in the next decade,' the report states. Prev Next It is well-known that the cost of home insurance is increasing in many areas due in part to climate change-driven hazards. This is causing insurance policies to become unaffordable for many people, which exposes them to financial risk from a flood, wildfire or hurricane, for example. It is also prompting insurance companies to flee particularly disaster-prone locations, such as Florida and California. In California, State Farm is raising rates by 17% in one year due in large part to wildfire-related losses. 'When climate events destabilize local housing markets, it doesn't just affect those directly hit,' said Jeremy Porter, head of climate implications for First Street and an author of the report. 'It ripples through the financial system, driving up mortgage rates, directly impacting individual credit risk, and pricing more people out of homeownership,' Porter said. Relying on a combination of peer reviewed methods and new techniques, Porter looked at the number, amount and pattern of foreclosures following wildfire, extreme wind and flooding events nationally. He found the best predictor of rising foreclosure rates among climate-related factors is flooding, particularly when it occurs outside of FEMA flood zones, where homeowners are far less likely to have flood insurance. The study also linked rapid increases in insurance premiums over time at the ZIP code level to increases in foreclosures in those same ZIP codes, finding that insurance increases are putting many families in a more financially vulnerable position and creating greater risks for lenders. Properties flooded in an extreme weather event face a 57% higher foreclosure rate than nearby, unflooded homes, Porter said. One underlying trend used for the study is the rapid increase in costs of natural disasters in the US, as shown in the National Oceanic and Atmospheric Administration's billion-dollar weather and climate disaster database. However, the agency recently announced that due to staffing cuts and shifting priorities, it will no longer update this list, forcing groups like First Street to rethink their methodology and rely on other, potentially inferior datasets.
Associated Press
18-05-2025
- Business
- Associated Press
Bonside Scorecard Launches Alongside Strategic Partnership with Kimco Realty and Nuveen Real Estate
This partnership will support the launch of Bonside's forthcoming proprietary underwriting tool NEW YORK, May 18, 2025 /PRNewswire/ -- Today, Bonside, a technology company that provides financial underwriting and funding to brick-and-mortar businesses, announces a strategic partnership with leading real estate investment trust Kimco Realty and global investment manager Nuveen Real Estate. As part of this partnership, both firms made equity investments in Bonside and will be among the first users of the company's new proprietary underwriting product, the Bonside Scorecard, designed to help commercial landlords more efficiently assess the creditworthiness and risk of new and existing non-credit retail tenants. The Bonside Scorecard brings much-needed standardization to how commercial landlords evaluate the financial and operational health of retail tenants. Built on the same underwriting process that drives Bonside's own investment decisions, and 37 transactions to date, the tool enables landlords to quickly and effectively assess tenant performance via accounting software data. At the nucleus of Bonside is the ability to analyze, standardize and capitalize the rise of non-credit retail. By emphasizing the fundamentals of physical retail, Bonside serves the category with specificity — weighing metrics like 4-wall EBITDA, COGS, labor ratios, and 20+ other industry-specific metrics to bring purpose-built underwriting and an investment-grade mentality to the brick-and-mortar economy. For landlords, this means streamlining and standardizing the tenant diligence process and holistic risk assessments at the property and portfolio level. For tenants, it removes friction and inconsistency, allowing rising concepts to compete for sought-after spaces and sign leases without manual effort. This partnership marks a major milestone in Bonside's growth and furthers its mission to define, and service, the brick-and-mortar economy. Since launching in 2023, Bonside has funded 37 deals and has $25 million in assets under management. Their flexible financing model, The Repeatable Revenue Agreement (RRA), gives businesses the opportunity to scale without giving up equity or entering debt, all powered by Bonside's proprietary underwriting platform. About Bonside Bonside is based in NYC and publicly launched in June of 2023, to provide underwriting intelligence and capital to brick-and-mortar concepts, at scale. Press Contact Rachel Pietrangelo [email protected] Bonside View original content: SOURCE Bonside
