Fitch Ratings Affirms ProLogis.Business Editors NEW YORK--(BUSINESS WIRE)--Dec. 12, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms ProLogis' (NYSE NYSE See: New York Stock Exchange :PLD (Programmable Logic Device) Refers to a variety of logic chips that are programmable at the customer's site, the customer being the vendor of the finished chip, not the end user. ) senior unsecured notes at 'BBB+' and the outstanding cumulative redeemable 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. at 'BBB'. PLD's recently-issued $125 million of series F cumulative redeemable preferred stock and $110 million of series G cumulative redeemable preferred stock is assigned a 'BBB' rating by Fitch. Approximately $2.1 billion in securities are covered by Fitch's actions. The Rating Outlook is Stable. The ratings and Outlook reflect favorably on the stable cash flows provided by PLD's diverse portfolio of North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. industrial properties and investments in sponsored funds and joint ventures, deep management team, and global operating infrastructure. These strengths are balanced by weaker U.S. industrial market conditions that continue to pressure occupancy levels for PLD's stabilized and recently completed properties, the company's relatively high percentage of earnings derived from development gains related to contributions to funds, its share of earnings in sponsored funds and joint ventures, and the size and scope of the company's development pipeline. Fitch's rating is based primarily on the capacity of PLD's directly-owned U.S. properties, and more specifically unencumbered properties, to service and support refinancing for unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. obligations. For the nine months ending Sept. 30, 2003, directly owned properties contributed 55% of PLD's total earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
See also: Dispose its remaining cold storage assets. PLD's financial protection measures are considered by Fitch to be adequate for the current rating level, with EBITDA from directly owned properties providing 2.4 times (x) coverage of consolidated interest expense, which is at the low end for the BBB BBB A medium grade assigned to a debt obligation by a rating agency to indicate an adequate ability to pay interest and repay principal. However, adverse developments are more likely to impair this ability than would be the case for bonds rated A and above. + rating. PLD's total interest coverage was 3.3x including development gains, the company's proportionate share of EBITDA from PLD-sponsored funds, and temperature controlled. Consolidated debt plus preferred stock to total undepreciated book capital was 50% for the most recent quarter ended Sept. 30, 2003, also at the high end for the rating category. Proforma for the recent redemption of series D cumulative redeemable preferred and the issuance of series F and G preferred, after adjusting for non-recurring items, fixed charge coverage will be approximately 2.2x, comparable to the company's peers. While Fitch recognizes the earnings contribution from development gains and property funds, it believes these sources to be of lesser credit quality than EBITDA from directly owned properties. Fitch believes that development profits could be stressed by an extended downturn in property markets, and that leveraged off-balance sheet investments provide only moderate incremental support for refinancing of unsecured debt obligations. As PLD grows these business segments, the company's ability to maintain a stable credit profile will depend on its ability to self-fund these activities and maintain a stable relationship between unencumbered assets and unsecured debt obligations. Headquartered in Aurora, Colorado, ProLogis owns, manages, and develops, industrial distribution facilities in 68 markets in North America, Europe and Asia. ProLogis owns 237.2 million square feet of industrial space located in 1,759 facilities. |
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