Fitch upgrades Public Storage

Fitch Ratings said it upgraded Public Storage's issuer default rating and $300 million unsecured revolving line of credit to A from A-, its $3.4 billion preferred stock to A- from BBB+ and Shurgard Storage Centers, LLC's issuer default rating and $297.2 million senior unsecured notes to A from A-.

The outlook was revised to stable from positive.

The agency said the upgrade revolves around the company's highly granular portfolio of over 2,100 self-storage facilities and strong balance sheet, which has been particularly resilient throughout the current recession and as headwinds persist across the capital markets. The company's low utilization of debt and limited refinance risk are a result of its significant utilization of preferred stock, Fitch said, and the company continues to seek avenues toward strengthening its balance sheet.

Most recently, Public Storage spent $113 million in a tender offer to purchase bonds originally issued by Shurgard Storage Centers, Inc. The agency said pro forma for the effects of the tender offer, the debt-to-recurring EBITDA ratio as of Dec. 31 was strong at 0.5 times.

As for the outlook change, Fitch said it no longer expects Public Storage's fixed-charge coverage to decline to below 3 times in 2009.

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