BANGALORE (Thomson Financial) - Standard & Poor's Ratings Services said it
has revised its outlook on Equity One Inc to stable from positive, reflecting
non return of the company's credit metrics to their previous stronger levels,
which reduce the potential for an upgrade in the near term.
The ratings agency also said it has affirmed its 'BBB-' corporate credit and
senior unsecured debt ratings on the company, which affects 745 mln usd of rated
senior unsecured notes.
S&P said the ratings reflect Equity One's good-quality, largely
grocery-anchored portfolio, its shift to a less aggressive operating strategy
and its maintenance of a solid balance sheet.
S&P said it expects Equity One's portfolio to continue to produce a stable
income stream due to its good-quality, diversified, necessity-oriented tenant
base.
A manageable lease expiration schedule and moderate capital needs also
provide support to current debt coverage measures, which should remain stable
despite the likelihood that a weaker macroeconomic environment will affect
consumer spending this year, it added.
But the ratings agency warned that it will lower the rating if Equity One's
secured debt levels increase as the above-average encumbrance continues to limit
Equity One's ability to take on additional secured debt at the current rating
category.
S&P also said it will lower the rating if the company pursues growth more
aggressively to the detriment of its balance sheet, or it pursues very large
non-retail initiatives on balance sheet.
The company's comparatively more complex ownership structure remains a
credit consideration as well and that just over half of the company's retail
portfolio is located in Florida, a region that is experiencing significant
housing market challenges that are likely to temper retail sales in the near
term, S&P added.
TFN.newsdesk@thomson.com
man/rda/alo
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