S&P cuts Developers Diversified

Standard & Poor's said it lowered the corporate credit and senior unsecured debt ratings on Developers Diversified Realty Corp. to BBB- from BBB and its preferred stock to BB from BB+.

The outlook was revised to negative from stable.

According to S&P, the downgrades reflect above-average leverage, low debt service coverage and high credit line usage, which limits the company's financial flexibility given the weak and uncertain macroeconomic environment.

Ratings remain supported by expectations for a comparatively modest impact from retailer woes on core cash flow, as the company's relatively young community shopping center portfolio is entering this downturn well leased, the agency said.

The longer average lease terms of the big-box retailers that anchor most of its centers and a still favorable mark-to-market rent profile provide additional support, the agency added.

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