Moody's confirms ProLogis, cuts AMB senior unsecured

Moody's Investors Service confirmed ProLogis' senior unsecured debt rating at Baa2 and downgraded AMB Property Corp.'s senior unsecured rating to Baa2 from Baa1.

The outlook is stable.

This concludes a review that began in February.

These actions follow news that AMB and ProLogis executed on their agreement to combine in an all-stock merger, with the merged entity to be called ProLogis, Moody's said.

The ratings reflect the REIT's large pool of high quality unencumbered assets, which should continue to improve in size, quality and geographic diversity as the REIT executes on its on-balance sheet development program, the agency said.

ProLogis benefits from strong tenant relationships underpinning a growing global franchise and the diversification gains derived from its established fund management platform and international strategy, Moody's said.

These strengths are mitigated by the new entity's earnings weakness due to a drop off in development business, large land bank and challenging industrial fundamentals, the agency said.

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