S&P Upgrades Howard Hughes to 'B+' on Strong Leverage

Key Rating Action

S&P Global Ratings has raised Howard Hughes Holdings Inc. (HHH) to a 'B+' credit rating while keeping the company on CreditWatch positive. The decision reflects HHH's current and projected leverage figures meeting the agency's criteria for an upgrade.

Financial Standing and Outlook

As of September 30, 2025, HHH's S&P Global Ratings-adjusted debt to EBITDA was 5.1x. S&P forecasts the company's standalone 2026 debt to EBITDA will be 5.8x. The rating agency anticipates improved operating performance in 2026, driven by significant condominium sales from The Park Ward Village project and stronger leasing in its multifamily portfolio.

Strategic Acquisition Impact

The company's proposed $2.1 billion acquisition of Vantage Group Holdings Ltd. is seen as a key factor that could further enhance its credit quality. This transaction will transform HHH into a more diversified holding company. The CreditWatch positive status suggests S&P may raise the rating again once the acquisition closes, which is expected in the second quarter of 2026.

Summary Outlook

The rating upgrade is based on HHH's solid financial metrics and debt management strategy. The upcoming acquisition and strong performance in key segments are expected to sustain this positive momentum, potentially leading to further credit improvements.

FAQ

Q: Why did S&P upgrade Howard Hughes Holdings?
A: The upgrade to 'B+' was primarily due to the company's improved current and forecasted leverage metrics, which aligned with S&P's upgrade threshold.

Q: What is the significance of the CreditWatch positive status?
A: It indicates a strong possibility that S&P may further increase HHH's credit rating, especially upon the successful closing of its proposed acquisition of Vantage Group.

Source: Investing.com