CarrAmerica Realty Rtgs Afmd Post Nt Issue; Otlk Stbl.Business Editors NEW YORK--(BUSINESS WIRE)--Standard & Poor's Jan. 9, 2002-- Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its triple-'B' corporate credit rating on CarrAmerica Realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. Corp. and CarrAmerica Realty L.P. In addition, ratings on the company's existing senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. are affirmed at triple-'B' and triple-'B'-minus, respectively. The outlook remains stable. The affirmations follow the announcement today that CarrAmerica has issued $400 million of senior unsecured notes. The proceeds of the notes, which mature in 2012, will be used to reduce amounts outstanding under the company's $500 million unsecured line of credit. In November 2001 CarrAmerica used its line of credit to complete the repurchase of 9.2 million shares of its common stock from Security Capital Group (triple-'B'/CreditWatch Positive) on a leveraged basis. While this new debt issuance does not positively impact debt leverage (about 50% debt-to-book capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. ) it does fix interest rates and appropriately lengthens the company's debt tenor. Coverage is expected to remain at about 2.2 times fixed charges, which is sufficient for the current rating. In order to manage higher debt levels, the company has reduced its targeted average acquisitions for 2002 to about $100 million from about $212 million. Washington, D.C.-based CarrAmerica is an office REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). with a current equity market capitalization Equity Market Capitalization A measure of the total market value of an equity market. The measure is calculated by taking the market capitalization of all companies in the equity market and adding them together to arrive at the capitalization for the market as a whole. of $1.9 billion and a portfolio of 288 properties comprising 24 million square feet. OUTLOOK: STABLE Tolerance for higher leverage does indicate a more aggressive financial policy in the near term. However, the company's ratings remain supported by a property portfolio that appears well positioned, with strong average occupancies and a weighted average rental rate that still appears to be modestly below market. While the value of the company's remaining investment in HQ Global Workplaces Inc. has weakened considerably, it is relatively modest at $42 million, and CarrAmerica, to date, has not recognized any income from regarding this investment. |
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