S&P Global Ratings has raised its long-term ratings on Howard Hughes Holdings Inc. and its operating subsidiary Howard Hughes Corp. to BB+ from B+ and removed both companies from CreditWatch positive, where they had been placed on Dec. 19, 2025. In a related move, S&P upgraded the issue-level rating on Howard Hughes Corp.'s senior unsecured debt to BB+ from BB- and revised the recovery rating to 4 from 2.
The rating agency linked the actions to Howard Hughes' recent acquisition of Bermuda-based insurer Vantage Group Holdings Ltd. for about $2.1 billion. Howard Hughes financed the transaction with $1.2 billion in cash drawn from its balance sheet and $1.0 billion in non-interest-bearing preferred stock issued to Pershing Square affiliate Pershing Square Holdings Ltd.
S&P said the insurer's addition to Howard Hughes' corporate structure should produce more-stable, less cyclical cash flow relative to the company's established real estate development and operations businesses. The agency described Vantage Group as well-capitalized and noted that insurance operations generally offer greater predictability compared with capital-intensive, cyclical real estate activities.
In its rationale, S&P also flagged the degree of support Howard Hughes is expected to receive from Pershing Square Inc. and related affiliates. Collectively, Pershing Square Inc. and various Pershing Square funds hold a plurality position, owning 47% of Howard Hughes' common stock. Pershing Square's CEO Bill Ackman serves as chairman of the Howard Hughes board, while the firm's CIO, Ryan Israel, sits on the board and holds the role of Howard Hughes' CIO.
S&P assigned a stable outlook to the ratings, reflecting the expectation that Howard Hughes will remain a strategic, long-term holding for Pershing Square and will be important to its investment plan over the coming 12 months. The agency also anticipates a more conservative approach to capital allocation within the real estate business and projects leverage at the Howard Hughes Corp. subsidiary to be nearer to 5.5x over the next two years.
The upgrade restores higher-grade credit metrics for Howard Hughes and adjusts the expected recovery for creditors. The step-up in the recovery rating to 4 from 2 indicates S&P's view of improved potential creditor recoveries, consistent with the upgraded issue-level debt rating.
Context and implications
- Howard Hughes has diversified its corporate cash flows by incorporating an insurance business into its portfolio via the Vantage Group acquisition.
- The $2.1 billion purchase was funded with a mix of $1.2 billion cash and $1.0 billion in non-interest-bearing preferred stock issued to a Pershing Square affiliate, preserving liquidity while aligning ownership interests.
- S&P highlighted both the capital adequacy of Vantage Group and the stabilizing effect of insurance revenue compared with cyclical real estate operations.
S&P's decision to remove the companies from CreditWatch positive formalizes the agency's view that the deal has strengthened Howard Hughes' credit profile sufficiently to justify the rating increases. The stable outlook signals limited near-term downside in the agency's view, conditional on continued strategic alignment with Pershing Square and conservative capital management in the real estate business.