Fitch Affirms Taubman Centers' Preferred Stock at 'BB-'.

NEW YORK -- Fitch Ratings has affirmed the 'BB-' rating on Taubman Centers, Inc.'s (TCO) $300 million in outstanding preferred stock, as well as the 'BB' rating on The Taubman Realty Group Limited Partnership, the operating partnership of Taubman Centers, Inc. The Rating Outlook is Stable.

The ratings reflect TCO's high quality and geographically diversified portfolio of regional shopping centers and malls. The productivity of the Taubman malls is among the highest in the industry as tenant sales topped $500 per square foot in 2005. TCO has importantly reduced its exposure to floating rate debt, which was 14% of total debt outstanding as of Dec. 31, 2005. While still higher than many real estate investment trusts (REITs), TCO has also curtailed its development pipeline as a percentage of total assets to some extent. Although TCO has employed an exclusively secured financing strategy, it now has three unencumbered properties since mortgages on these assets have recently been paid off. Moreover, TCO also does possess additional flexibility through its two lines of credit totaling $390 million, which are secured by two properties and had no borrowings outstanding as of Dec. 31, 2005. Furthermore, near-term requirements, such as TCO's lease expirations and debt maturities are reasonably manageable and both average approximately 6% per annum over the next five years. Tenant diversity for TCO is also sound as the top five tenants comprise only 15% of total mall gross leaseable area (GLA).

The ratings acknowledge the significant asset concentration inherent in the portfolio as TCO only has a total of 21 properties. In addition, TCO's largest two properties comprise a disproportionate 25% of total company net operating income (NOI). Despite this, the portfolio has relatively strong geographic diversification with a presence in 19 separate markets and strong underlying operating performance as same-store NOI growth increased 6.6% in 2005 and year-end (YE) occupancy improved to 90%.

The Fixed Charge ratio, defined as recurring earnings before interest, taxes, depreciation and amortization (EBITDA) less capital expenditures and straight line rent adjustments to total interest expense and preferred dividends for TCO was 1.6 times (x) for the twelve months ending Dec. 31, 2005. With respect to leverage, debt plus preferred stock to undepreciated book capital basis was 78.1% at YE 2005. Both of these measures are consistent with the 'BB' issuer rating and 'BB-' preferred stock rating.

Taubman Centers, Inc. (TCO) is a self-administered Michigan-based REIT that acquires, develops, owns, and manages regional shopping centers. As of Dec. 31, 2005, TCO had interests in 21 regional and super regional shopping centers aggregating 23.6 million square feet of GLA located in ten states. Ten of TCO's properties are wholly owned, three are also consolidated and 95%, 90% and 50.1% owned, respectively and eight of the properties are held in joint ventures. TCO currently has total assets of approximately $2.8 billion, total debt of $2.1 billion, and an undepreciated total book capital of $3.1 billion.

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