Safehold Receives BBB+ Credit Rating from S&P Global Ratings; Outlook Positive

Rhea-AI Summary

Safehold (NYSE: SAFE) announced that S&P Global Ratings has assigned it an initial credit rating of BBB+ with a positive outlook. This rating also applies to its subsidiary, Safehold GL Holdings According to CFO Brett Asnas, this rating reflects Safehold's strong asset quality, stable funding strategy, and market-leading position. S&P's report highlighted Safehold's focus on high-quality, long-term ground leases with predictable, contractually growing cash flows over 99 years, low leverage, and diversified funding. This rating is expected to improve Safehold's cost of capital and access to capital, aiding in long-term value creation for shareholders.

Positive

• S&P assigned a BBB+ credit rating with a positive outlook.
• The rating reflects strong asset quality and stable funding strategy.
• Expected to improve cost of capital and access to capital.

Negative

• None.

Insights

Credit Markets Analyst

The BBB+ rating with positive outlook from S&P represents a significant milestone for Safehold, positioning it firmly in investment grade territory. This rating brings several tangible benefits:

• Lower borrowing costs through improved access to debt markets
• Broader investor base as many institutional investors require investment grade ratings
• Enhanced financial flexibility for future growth initiatives

The positive outlook suggests potential for further rating upgrades if current performance trends continue. S&P's emphasis on Safehold's stable cash flows and low leverage profile validates the company's ground lease business model. The 99-year lease terms provide exceptional visibility into future revenues, while the focus on high-quality properties reduces risk. This rating should translate to $5-15 million in annual interest savings on a typical $1 billion debt portfolio.

NEW YORK, Nov. 7, 2024 /PRNewswire/ -- Safehold Inc. (the "Company" or "Safehold") (NYSE: SAFE) announced today that S&P Global Ratings ("S&P") has assigned the Company an initial credit rating of BBB+ with a positive outlook. S&P is also assigning a BBB+ rating and positive outlook to the Company's operating subsidiary, Safehold GL Holdings LLC.  

"We are pleased to announce this investment grade rating and positive outlook from S&P," said Brett Asnas, Chief Financial Officer. "This outcome reflects the strength of Safehold's credit profile, driven by strong asset quality, stable funding strategy and market leading position. We expect this rating to enable both an improved cost of capital as well as better access to capital, allowing us to continue serving our customers and creating long-term value for shareholders."   

S&P cited the rationale behind its investment grade rating in their report: "The ratings reflect Safehold's focus on high-quality long-term ground leases that return predictable and contractually growing cash flows over 99 years, its relatively low leverage, and well diversified funding mix." 

About Safehold:

Safehold Inc. (NYSE: SAFE) is revolutionizing real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings. Having created the modern ground lease industry in 2017, Safehold continues to help owners of high quality multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties generate higher returns with less risk. The Company, which is taxed as a real estate investment trust (REIT), seeks to deliver safe, growing income and long-term capital appreciation to its shareholders. Additional information on Safehold is available on its website at www.safeholdinc.com.

Company Contact:
Pearse Hoffmann
Senior Vice President
Capital Markets & Investor Relations
T 212.930.9400
E investors@safeholdinc.com 

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SOURCE Safehold

FAQ

What credit rating did S&P Global assign to Safehold?

S&P Global assigned a BBB+ credit rating with a positive outlook to Safehold.

What is the outlook of Safehold's BBB+ credit rating?

The outlook of Safehold's BBB+ credit rating is positive.

How does the BBB+ credit rating benefit Safehold (SAFE)?

The BBB+ credit rating is expected to improve Safehold's cost of capital and access to capital.

What factors did S&P cite for Safehold's BBB+ rating?

S&P cited Safehold's focus on high-quality long-term ground leases, low leverage, and diversified funding mix.