S&P Raises 5 Post-Merger JDN Rtgs, Afms Devlp Div Rtg.

Business Editors

NEW YORK--(BUSINESS WIRE)--March 20, 2003

Standard & Poor's--Standard & Poor's Ratings Services today raised its corporate credit rating on JDN Realty Corp. (JDN) to 'BBB' following the completion of its merger with Developers Diversified Realty Corp. (DDR).

At the same time, the ratings on $235 million of various senior unsecured notes previously issued by JDN are raised to 'BBB', the rating on $75 million of preferred stock is raised to 'BBB-', and all ratings are removed from CreditWatch, where they were placed with positive implications Oct. 9, 2002. The outlook is negative (see list).

JDN recently merged with DDR in a transaction valued at approximately $1 billion, which included DDR's assumption of the senior unsecured notes previously issued by JDN. These notes, as well as JDN's assets, will be held in a wholly owned subsidiary of DDR, though the ratings reflect the credit profile of the parent, as JDN's unsecured noteholders now benefit from a much broader and largely unencumbered portfolio of dominant retail assets as well as DDR's better access to capital.

DDR is one of the nation's largest owners and operators of shopping centers, with a combined portfolio of more than 400 retail properties aggregating approximately 87 million square feet. Integration is expected to proceed smoothly as the two portfolios share similar characteristics. Both are relatively new (average age is approximately 10 years) and well occupied (approximately 96%). Both portfolios tend to be anchored by leading value-oriented retailers that are signed to long-term leases. The combination of credit-quality tenants and long average lease tenor should continue to provide the parent with a stable income stream. The combined company does have a large $640 million development pipeline (including its share of joint venture projects). However, those projects are presently more than 85% preleased and DDR's share of the cost to complete those projects is less than $150 million.

The transaction presents the opportunity for DDR to modestly improve its financial profile, which has historically been weaker than the peer group average, and eliminate a weakened but still active development competitor. As of Dec. 31, 2002, DDR had total debt of $1.5 billion, representing 56% of total capital on a book value basis. Variable rate debt comprised 42% of that total, which supported improved coverage measures of 3.05x debt service and 2.05x fixed-charges. Because JDN had operated with similar levels of debt (on a relative basis), the transaction is essentially leverage neutral, though it does provide opportunities for DDR to improve its balance sheet by using the proceeds of identified asset sales to reduce short-term debt levels. Already, DDR has refinanced JDN's $300 million secured credit facility with a $300 million unsecured term loan, effectively unencumbering 49 assets with an estimated value of approximately $474 million and creating an estimated savings of $2.6 million in annual interest expense. The term loan will also be used to refinance $75 million of JDN's senior unsecured notes, which mature at the end of March, at an estimated additional savings of approximately $3.2 million in annual interest expense.

OUTLOOK: NEGATIVE

The negative outlook continues to reflect DDR's presently weaker-than-average financial profile, and to a lesser extent, modest concerns regarding integration of JDN's assets and development pipeline. Standard & Poor's will continue to monitor management's success at accomplishing its stated de-leveraging goals. A return to stable outlook will be contingent upon management achieving and sustaining lower leverage and improved debt protection measures. If these goals prove elusive, ratings would be lowered by one notch.

RATINGS RAISED
                                            Rating
JDN Realty Corp.                         To        From
 Corp. Credit Rtg                        BBB/Neg   BB-/Watch Pos
 $75 mil 6.8% sr unsec nts due 2004      BBB       B
 $85 mil 6.95% sr unsec nts due 2007     BBB       B
 $75 mil 6.918% mand put secs due 2013   BBB       B
 $75 mil 9.375% class A prf stk          BBB-      B-

RATINGS AFFIRMED

Developers Diversified Realty Corp.      Rating
 Corporate Credit Rating                 BBB/Neg
 $378 mil sr nts various maturities      BBB
 $449 mil various pref stk issues        BBB-

Copyright 2003, Standard & Poor's Ratings Services