REAL ESTATE - Bouwfonds, the ABN AMRO property fund put up for sale in December, announced last week that it had shortlisted would-be buyers as credit rating agency Moody’s confirmed it was holding the firm on review for possible downgrade.

“We spoke to Moody’s two weeks ago and they confirmed that they would have to review the rating regularly until the transaction because they don’t know whether the new shareholder will give the same level of support as the current parent,” said Bouwfonds’ Pieter van der Harst.

The rating agency’s decision comes despite recent positive news from the €15bn fund. In March it reported a 16% rise in net profits for 2005 to €314m. It also boosted its international management team.

But van der Harst said the Hoevelaken-based fund did not resent the agency’s decision. “I understand their point of view,” he said. “On a standalone basis, without the support of a strong shareholder, Bouwfonds would not enjoy the rating it has today.”

The sale is scheduled for completion mid-year. ABN Amro and Bouwfonds have jointly drawn up a shortlist – “short is the wrong word but it’s shorter than the original list” – of bidders who have expressed an interest and who will now receive an information memorandum.

Selection criteria will undoubtedly include sufficient shareholder strength to drive up its ratings with both Moody’s and rival agency Standard & Poor’s.

“In our business model, ratings are important and we place great importance on creditworthiness in the selection process,” said Harst.

Bouwfonds’ size would likely put off all but large financial institutions. Initial interest from domestic players was muted, with only Rabobank confirming that it would likely pitch for the fund in a bid to expand in its home market.

ABN Amro put the fund up for sale because Bouwfonds fell outside its mid-market strategy.