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Fri, August 6, 2010 Fitch Rates AMB Property, L.P.'s $300MM 4.5% Sr Unsecured Notes 'BBB'; Outlook Stable
NEW YORK--([ BUSINESS WIRE ])--Fitch Ratings has assigned a 'BBB' rating to the new $300 million par value 4.5% senior unsecured notes due Aug. 15, 2017 issued by AMB Property, L.P. and guaranteed by AMB Property Corporation (NYSE: AMB). AMB Property, L.P. is the operating partnership of AMB Property Corporation (collectively, AMB). Net proceeds from the offering are expected to be used to retire existing debt and for general corporate purposes.
"Fitch Downgrades AMB Property Corp.'s IDR to 'BBB'; Outlook to Stable"
On July 29, 2010, Fitch downgraded AMB's Issuer Default Rating (IDR) of AMB to 'BBB' from 'BBB+'. The Rating Outlook was revised to Stable from Negative. The rating downgrade was based upon Fitch's expectation that AMB's near- to medium-term credit profile will remain consistent with an IDR of 'BBB'. The downgrade also contemplated Fitch's Negative Outlook for industrial real estate investment trusts (REITs) in 2010, which is driven by challenging macroeconomic fundamentals that have weakened overall industrial tenant demand and significantly reduced market rents and occupancy rates during this cycle. The downgrade further reflected Fitch's view that while conditions have modestly improved in the industrial market, macroeconomic conditions remain uncertain and weakening global macroeconomic growth could put further pressure on the operating performance of AMB's portfolio that could have a negative impact on AMB's fixed charge coverage and leverage metrics.
The 'BBB' ratings reflect AMB's large, high-quality, and well-diversified portfolio of global industrial properties, a well-diversified tenant roster, demonstrated access to a wide variety of capital sources throughout cycles, a good liquidity position, and a large pool of unencumbered assets.
AMB is a global industrial REIT based in San Francisco with $7.1 billion in total book assets (approximately $7.9 billion market capitalization) as of June 30, 2010. The company's strategy is to invest in and manage properties in the world's busiest distribution markets, specifically large, supply-constrained locations with proximity to key airports, seaports, and major freeway systems.
The company's properties largely consist of industrial facilities that are located in infill submarkets. AMB is also one of the world's largest providers of air cargo/freight facilities.
For additional information, please refer to Fitch's rating action commentary, dated July 29, 2010, "Fitch Downgrades AMB Property Corp.'s IDR to 'BBB'; Outlook to Stable" at [ www.fitchratings.com ].
This rating action reflect the application of Fitch's current criteria which are available at
[ www.fitchratings.com ] and specifically include the following reports:
--'Parent and Subsidiary Rating Linkage' (July 14, 2010);
--'Criteria for Rating U.S. Equity REITs and REOCs' (April 16, 2010);
--'Equity Credit for Hybrids & Other Capital Securities- Amended' (Dec. 29, 2009);
--'Rating Hybrid Securities' (Dec. 29, 2009);
--'Recovery Rating and Notching Criteria for REITs' (Dec. 23, 2009);
--'Corporate Rating Methodology' (Nov. 24, 2009);
--'Evaluating Corporate Governance' (Dec. 12, 2007).
Additional information is available at [ www.fitchratings.com ].
Related Research:
Criteria for Rating U.S. Equity REITs and REOCs
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=510465 ]
Equity Credit for Hybrids & Other Capital Securities - Amended
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493112 ]
Rating Hybrid Securities
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493086 ]
Recovery Rating and Notching Criteria for REITs
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=492828 ]
Corporate Rating Methodology
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=489018 ]
Evaluating Corporate Governance
[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=363502 ]
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