Moody’s cuts Vornado

Moody's Investors Service said it downgraded Vornado Realty LP's senior unsecured debt rating to Ba1 from Baa3 and changed the outlook to stable from negative. The agency also lowered Vornado's senior unsecured debt shelf to (P)Ba1 from (P)Baa3 and its subordinate debt shelf to (P)Ba2 from (P)Ba1.

Moody's said it assigned a Ba1 corporate family rating and a speculative grade liquidity rating of SGL-1 to Vornado Realty LP. Finally, Moody's downgraded the preferred stock and preferred shelf ratings of Vornado Realty Trust, the parent of Vornado Realty LP, to Ba3 from Ba1, and (P)Ba3 from (P)Ba1 respectively,

“The downgrade reflects the declining trend in Vornado's fixed charge coverage and the expectation that the metric will remain weak over the next one to two years. Moody's revised the outlook to stable from negative due to the REIT's predictable operating cashflows and very good liquidity, which offset the challenges related to the difficult leasing and financing markets,” the agency said in a press release.

The improved outlook reflects a forecast for the REIT's high-quality assets with modest lease expirations to continue delivering steady operating cashflows over the next 12-18 months, Moody’s said.

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