Unibail-Rodamco-Westfield: Sells Assets Near Book Value; Affirming Value in Securities

Unibail-Rodamco-Westfield continues to sell assets near book value. That’s despite URW securities trading at a massive 65% discount to the group's EUR 121 in net tangible assets and a 55% discount to our unchanged EUR 95.50 fair value estimate (AUD 7.80 for the Australia-listed chess depositary interests). It doesn’t make sense for URW to trade at such a big discount unless it is forced into a dilutive equity raise. Our base case is that won’t be required. With URW at a 4.2 times interest coverage ratio and interest costs near 100% hedged for several years, we think the group can grind down its debt burden even without asset sales.