OREANDA-NEWS. S&P Global Ratings said today that it has assigned its 'A+' issue rating to Blackstone Group L. P.'s proposed euro-denominated senior unsecured notes. The size of the offering has not been finalized and will be subject to market conditions, but, for the purposes of our rating, we are assuming the amount will be no more than €600 million and no less than €500 million. The notes will be issued by Blackstone Holdings Finance Co. LLC and fully and unconditionally guaranteed on a joint and several basis by The Blackstone Group L. P., Blackstone Holdings I L. P., Blackstone Holdings AI L. P., Blackstone Holdings II L. P., Blackstone Holdings III L. P., and Blackstone Holdings IV L. P. The long-term issuer credit rating on Blackstone Group L. P. is 'A+' and the outlook is stable.

Management expects to use the majority of the proceeds for general corporate purposes. Pro forma this transaction, assuming the amount of the new issuance is €500 million, we expect total debt to adjusted EBITDA will remain well below 1.5x (including our operating lease adjustment and a portion of cash and liquid investments netted against total debt).

Our rating on Blackstone reflects our assessment of its business risk profile as strong, due to the company's solid market position in the global alternative asset management industry and significant diversification within its business lines. Total assets under management (AUM) were $356.3 billion as of June 30, 2016, up 7% year over year. The growth in AUM was primarily due to $22.1 billion in net inflows and $1.5 billion in market appreciation. Fee-paying AUM were $266.0 billion as of June 30, 2016, an 11% year-over-year increase. Our ratings also incorporate the company's minimal financial risk, given our expectation for debt to EBITDA to remain below 1.5x. We expect debt to adjusted EBITDA weighted (20% for 2015 and 40% each for 2016 and 2017) to be approximately 0.0x, and adjusted EBITDA to interest weighted to be approximately 10.5x. We apply a 50% haircut to the five-year average of net realized performance fees and net realized investment income in the calculation of adjusted EBITDA.