S&P cuts Developers Diversified to junk

Standard & Poor's said it lowered the corporate credit rating on Developers Diversified Realty Corp. to BB from BBB-, unsecured debt to BB+ from BBB- and preferred stock to B from BB, and removed ratings from CreditWatch, where they were placed on March 6.

The agency assigned a recovery rating of 2 to the company's senior unsecured debt.

The outlook is negative.

"The downgrade reflects our concern that DDR will be challenged to improve its currently constrained liquidity position and reduce its high leverage before its meaningful debt maturities from 2010 through 2012, when roughly 75% of the company's consolidated debt comes due," S&P analyst Elizabeth Campbell said in a statement.

"Even following a planned April equity raise, the company will remain highly reliant on asset sales and monetizations to raise capital. Additionally, we expect that higher retailer vacancies are likely to erode operating income this year, which would further pressure DDR's already low debt protection measures."

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.