Moody's rates Home Properties Baa2

Moody's Investors Service said it assigned a Baa2 issuer rating to Home Properties, Inc. The outlook is stable.

The agency said the Baa2 issuer rating reflects Home Properties' long history of strong operating performance through credit and real estate cycles - which is reflected in the company's stable occupancy in the mid-90% range, low resident turnover and solid same-store year-over-year NOI growth - and its solid credit metrics, including EBITDA margins of 59.2% and fixed charge coverage of 3.2 times as of the third quarter of 2013.

In Moody's view, these strengths are offset by the company's geographic concentration in Washington, D.C., and although the company has made strides to improve secured debt levels and its unencumbered asset pool, these metrics at 33.4% and 49.8%, respectively as of the third quarter, are not commensurate with the REIT's current rating. The agency expects a reduction of secured debt levels, which translates into a larger unencumbered asset pool, within the next 24 months.

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