S&P rates Realty Income notes BBB

Standard & Poor's said it assigned a BBB rating to the $550 million 6¾% senior unsecured notes due 2019 issued by Realty Income Corp.

The outlook is positive.

Proceeds from the note offering will be used to prefund property acquisitions that have closed or are expected to close in 2007.

The agency said Realty Income's BBB corporate credit rating acknowledge the company's conservatively financed growth strategy, along with solid operating results from an increasingly diversified investment portfolio.

The strengths of this traditionally stable cash flow stream are somewhat offset by the risks surrounding the low credit quality of its tenants and moderate industry concentrations, S&P said.

The positive outlook reflects Realty Income's improved capacity to absorb larger, more concentrated investments without compromising its strong balance sheet, S&P added.

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