S&P lowers Colonial

Standard & Poor's said it has lowered its corporate credit ratings on Colonial Properties and Colonial Realty LP to BB+ from BBB-.

The agency said it also assigned a recovery rating of 3 to the rated senior unsecured notes, indicating that lenders can expect meaningful recovery in the event of a payment default.

This recovery rating results in its lowering its credit rating on the roughly $1.35 billion of senior unsecured notes to BB+ from BBB-, S&P said, noting that it lowered its preferred stock rating to B+ from BB.

The agency said it also removed all of its ratings on the company from Creditwatch, where it had been placed with negative implications on Feb. 5.

The outlook is stable.

"The downgrade reflects its expectation that the company's debt-protection measures will remain low over the next two years as a result of operating weakness in Colonial's core apartment holdings, dilutive asset sales, and continuing, although lower, development spending," said credit analyst Elizabeth Campbell.

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