"The ratings downgrade reflects PEPR's poorer-than-expected financial metrics and heightened liquidity risk profile," explains Lynn Valkenaar, a Vice President-Senior Analyst in Moody's Corporate Finance Group. "The downgrade also relates to PEPR's heightened liquidity risk profile due to (1) the large refinancing requirement of EUR1.3 billion over the course of 2010, and (2) the limited headroom under its banking covenants," says Ms. Valkenaar. "Management has taken several positive steps to manage its overall liquidity and funding profile, but progress has been slower than Moody's expected. Therefore, Moody's is concerned about execution risk in light of the continuing difficult credit market conditions."As the CRE picture is getting worse by the moment, PEPR's stay at this bottom-most investment grade rung will likely not be too lengthy, as the company promptly continues on its downward trajectory.
Btw, this is a correction: ProLogis was kind enough to point out the difference between PEPR (rated Baa3) and PLD (Sr Unsecured rating Baa2), and that PEPR has very little to do with PLD, the development company. We were way ahead of ourselves to assume that PLD is in the same shape as PEPR. Sphere: Related Content Print this post