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Fitch Rates PS Business Parks, Inc.'s $75MM 6.875% Series R Preferred 'BBB-'; Outlook Stable

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  Published in Business and Finance on Monday, October 11th 2010 at 11:20 GMT by Market Wire
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NEW YORK--([ BUSINESS WIRE ])--Fitch Ratings assigns a credit rating of 'BBB-' to the $75 million 6.875% series R preferred stock issued by PS Business Parks, Inc. (NYSE: PSB). Net proceeds from the offering of approximately $72.6 million are expected to be used to redeem the company's approximately $48.4 million 7.6% series L preferred stock and for general corporate purposes. The transaction does not materially impact the company's fixed charge coverage ratio (defined as recurring operating EBITDA less recurring capital expenditures less straight-line rent adjustments divided by interest incurred and preferred stock dividends), which was 2.7 times (x) for the 12 months ended June 30, 2010.

Fitch currently rates PS Business Parks, Inc. and its operating partnership, PS Business Parks, L.P. as follows:

PS Business Parks, Inc.

--Issuer Default Rating (IDR) at 'BBB';

--$598.5 million preferred stock at 'BBB-';

--$100 million unsecured revolving credit facility at 'BBB' (as guarantor).

PS Business Parks, L.P.

--IDR at 'BBB';

--$100 million unsecured revolving credit facility at 'BBB' (as borrower).

The Rating Outlook is Stable.

For additional information, please refer to Fitch's June 7, 2010 full rating report, 'PS Business Parks, Inc.,' at '[ www.fitchratings.com ]'.

PS Business Parks, Inc. is a fully-integrated, self-advised and self-managed real estate investment trust (REIT) that acquires, develops, owns and operates commercial properties, primarily multi-tenant flex, office and industrial space. As of June 30, 2010, the company owned and operated 20.7 million rentable square feet of commercial space located in eight states. The company also manages 1.4 million rentable square feet on behalf of Public Storage (Fitch IDR of 'A' with a Stable Rating Outlook) and its affiliated entities. As of June 30, 2010, the company had $2.2 billion in gross book assets, an equity market capitalization of $1.8 billion, and a total market capitalization of $2.5 billion.

Additional information is available at '[ www.fitchratings.com ]'.

Applicable Criteria and Related Research:

--'Corporate Rating Methodology', Aug. 13, 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.

Applicable Criteria and Related Research:

PS Business Parks, Inc. (PS Business Parks, L.P.)

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=530411 ]

Recovery Rating and Notching Criteria for REITs

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=492828 ]

Rating Hybrid Securities

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493086 ]

Equity Credit for Hybrids & Other Capital Securities - Amended

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493112 ]

Criteria for Rating U.S. Equity REITs and REOCs

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=510465 ]

Corporate Rating Methodology

[ http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=546646 ]

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