Highwoods Properties Pfd Stk Rated 'BBB-' by S&P.NEW YORK--(BUSINESS WIRE)--S&P CreditWire 9/22/97--Standard & Poor's today has assigned its triple-'B'-minus rating to Highwoods Properties Inc.'s $150 million series B 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. . The proceeds will be used to repay mortgage debt, which will be assumed in connection with the proposed Associated Capital Properties (ACP (Associate Computing Professional) The award for successful completion of an examination in computers offered by the ICCP. It is geared to newcomers in the computing field. For more information, visit www.iccp.org. ACP - Algebra of Communicating Processes ) acquisition. In addition, Standard & Poor's 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 outstanding ratings of Highwoods Properties Inc. and Highwoods/Forsyth L.P., as listed below. The outlook is stable. The ratings acknowledge Highwoods' strong financial measures, conservatively leveraged capital base, and improved geographic diversification. However, the company's continued large appetite for growth somewhat offsets the strong financial position. Raleigh, N.C.-based Highwoods is a real estate investment trust that owns and manages offices (primarily suburban) and industrial properties in seven southeastern states. Highwoods' continues its rapid growth pace; recently announcing the acquisition of Associated Capital Properties (ACP), a Florida-based office company. The acquisition will increase Highwoods' portfolio to 449 properties encompassing 28.3 million square feet, from its current 365 properties (21.8 million square feet). In addition, Highwoods has 26 properties under development, which will add another 2.3 million square feet. As with previous acquisitions, Highwoods will retain the senior managers and property level personnel in order to minimize the risks associated with growth. The growth over the past three years has reduced the company's reliance on its home markets. With the ACP acquisition, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. and Florida will be Highwoods' two largest markets, and about equal contributors of revenue (around 35% each). Highwoods will have operations in 18 southeastern markets and will become the largest office owner in Florida. Portfolio occupancy is stable at 92%. Highwoods expects to complete the acquisition by Oct. 15, 1997. Financial measures are strong and will not change significantly with the proposed acquisition. Book value leverage at June 30 was 38%. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma for this offering and completion of the acquisition, leverage will decline to the low 30% area. Standard & Poor's anticipates that Highwoods will generally operate with a leverage around 40%. Debt service coverage, including principal amortization, is 3.1 times (x). Given the conservative leverage usage and predominantly fixed-rate debt structure, debt service coverage is expected to remain in the low to mid 3.0x range. Fixed-charge coverage fixed-charge coverage The number of times that a firm's operating income exceeds its fixed payments. Fixed-charge coverage is a measure of a firm's ability to meet contractually fixed payments, with high coverage indicating significant flexibility for making declines to about 2.4x from 2.9x with this issue, but is still adequate for the rating. Financial flexibility appears to be strong. Highwoods has demonstrated ability to access the capital markets, both public and private, and property encumbrance A burden, obstruction, or impediment on property that lessens its value or makes it less marketable. An encumbrance (also spelled incumbrance) is any right or interest that exists in someone other than the owner of an estate and that restricts or impairs the transfer of the estate or levels are moderate (about 40% of net operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. ). A $280 million unsecured revolver revolver: see small arms. revolver Pistol with a revolving cylinder that provides multishot action. Some early versions, known as pepperboxes, had several barrels, but as early as the 17th century pistols were being made with a revolving chamber to provides additional liquidity. OUTLOOK: STABLE The outlook assumes that Highwoods will successfully complete the merger and integration of Associated Capital properties into its operations. It is anticipated that Highwoods will continue to grow the company through mergers and portfolio acquisitions. In that respect, Standard & Poor's assumes that management will adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. a financial strategy that maintains its conservatively leveraged capital structure and strong coverage measures, an important credit cushion to the aggressive operating strategy. -- CreditWire -0- RATING ASSIGNED Highwoods Properties Inc. $150 mil ser B cum redeemable pfd stk BBB- RATINGS AFFIRMED Highwoods Properties Inc. Corp credit rtg BBB Pfd stk BBB- Mixed shelf debt (prelim) BBB-/BB+ Highwoods/Forsyth L.P. Corp credit rtg BBB Sr debt BBB Shelf debt (prelim) BBB CONTACT: Standard & Poor's Rating Services William Haley Sir William John Haley (May 24, 1901 - September 6, 1987) was a British newspaper editor and broadcasting administrator. Early in his career on the Manchester Evening News, Haley was found to be too shy to work as a reporter. He was then transferred to subediting. , 212/208-1286 |
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