S&P: Vornado outlook down to negative

Standard & Poor's said it revised its outlook on Vornado Realty Trust, and its subsidiary, Vornado Realty LP to negative and affirmed its BBB+ corporate credit ratings on the two companies.

Concurrently, the agency said it affirmed its ratings on the companies' senior unsecured notes and its preferred stock while it also revised our outlook to negative from stable.

"Our ratings on New York City-based Vornado reflect its view that the REIT's core portfolio of well-located office and retail properties will provide relatively stable cash flow even as broader commercial real estate trends continue to weaken," said credit analyst James Fielding.

"However, despite moderate growth in core property cash flow in recent years, key coverage measures remain weak relative to peers as a consequence of higher leverage, sizeable investments in joint ventures that don't currently contribute to its calculation of funds from operations, and several large and temporarily dilutive capital markets transactions."

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