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WELLSFORD RESIDENTIAL PROPERTY TRUST $75 MILLION CONVERTIBLE PREFERRED STOCK RATED 'BB+' BY DUFF & PHELPS

 NEW YORK, Nov. 4 /PRNewswire/ -- Duff & Phelps Credit Rating Co. has assigned a preliminary credit rating of `BB+' (Double-B-Plus) to Wellsford Residential Property Trust's proposed issuance of $75 million Series A cumulative convertible preferred stock. Net proceeds from the offering will be used to refinance approximately $19 million of secured credit facilities and to purchase $34 million of properties currently under contract. Remaining proceeds from this offering are targeted for future acquisitions.
 The D&P rating reflects Wellsford's attractive portfolio of multifamily apartment complexes which provide a stable source of cash flow to service fixed charges. The company's apartment complexes consist primarily of upscale units constructed in the mid-1980s with an average occupancy rate of over 96 percent. The D&P rating also reflects Wellsford's status as a publicly traded REIT with a high current payout of net income, and the company's somewhat limited operating history.
 Wellsford is a self-administered REIT which contracts with local property managers to provide leasing, rent collection and maintenance services. Cash management and financing activities are centrally managed by the REIT. As of Sept. 30, 1993, Wellsford's portfolio consisted of 29 apartment complexes aggregating 8,257 individual apartment units, located primarily in the Southwestern states of Texas, Arizona, Utah, New Mexico, Nevada and Colorado. On a pro forma basis for the first six months of 1993, the company's properties would have generated funds from operations of $14.3 million, and covered estimated interest expense and preferred stock dividends by 2.85 times.
 Pro forma for the proposed $75 million preferred stock issue and two pending acquisitions, Wellsford's balance sheet will be conservatively levered with debt leverage on a book basis of approximately 26 percent. However, leverage is likely to increase somewhat over the near term as additional properties are financed under Wellsford's $95 million of committed credit facilities. Though management has stated its intention to balance the use of debt with additional equity offerings, the preliminary rating of `BB+' also reflects our expectation that book debt leverage may increase into the 40 percent range at times. Since the company's November 1992 IPO, total owned units have increased by 57 percent to the present 8,257 units, with an additional 668 units expected to be acquired shortly.
 -0- 11/4/93
 /CONTACT: Joseph E. Franzetti, senior VP, 212-908-0200, or Scott J. O'Shea, VP, 212-908-0200, both of Duff & Phelps Credit Rating Co./


CO: Wellsford Residential Property Trust ST: IN: FIN SU: RTG

CK -- NY118 -- 0961 11/04/93 17:06 EST
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Publication:PR Newswire
Date:Nov 4, 1993
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