{"id":22461,"date":"2013-07-09T22:39:03","date_gmt":"2013-07-10T02:39:03","guid":{"rendered":"http:\/\/www.prefblog.com\/?p=22461"},"modified":"2013-07-09T22:39:03","modified_gmt":"2013-07-10T02:39:03","slug":"bpo-downgraded-to-p-3-by-sp","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=22461","title":{"rendered":"BPO Downgraded to P-3 by S&amp;P"},"content":{"rendered":"<p>Standard and Poor&#8217;s <a href=\"http:\/\/www.standardandpoors.com\/prot\/ratings\/articles\/en\/us\/?articleType=HTML&#038;assetID=1245354330813\">has announced<\/a>:<\/p>\n<blockquote>\n<ul>\n<li>While the company recently repaid debt to bolster its balance sheet  before a large lease expiry, we expect fixed-charge coverage measures to remain low and debt-to-EBITDA to remain high for the next two years.\n<li>As a result, we lowered our corporate credit rating on the company to &#8216;BBB-&#8216; from &#8216;BBB&#8217;, the senior unsecured issue-level rating to &#8216;BB+&#8217; from &#8216;BBB-&#8216;, and the preferred stock rating to &#8216;BB\/P-3&#8217; from &#8216;BB+\/P-3(High)&#8217;.\n<li>The stable outlook reflects our view that the pending vacancy in Brookfield Place New York will eventually be re-tenanted, which will support a recovery in portfolio operating cash flow and fixed charge coverage by 2016.<\/ul>\n<p><b>&#8230;<\/b><br \/>&#8220;The downgrade reflects our view that the company&#8217;s financial profile will remain weak over the next two years due to the pending large vacancy at Brookfield Place New York and uncertainty regarding the company&#8217;s commitment to strengthening fixed-charge coverage and debt-to-EBITDA metrics longer term, given the potential for meaningful development pursuits and\/or other largely debt-financed growth,&#8221; said credit analyst Elizabeth Campbell.<br \/><b>&#8230;<\/b><br \/>We don&#8217;t see any potential for upgrade despite Brookfield Office&#8217;s &#8220;strong&#8221; business risk profile, unless the company meaningfully deleverages its balance sheet to strengthen its currently &#8220;significant&#8221; financial risk profile, such that fixed-charge coverage rises to the high 1x area and debt-to-EBITDA declines below 9.0x.<\/p>\n<p>We don&#8217;t expect further downside pressure to the rating over the next two years. However, our credit perspective could change if BAM&#8217;s or BPY&#8217;s strategic evolution materially alters the operating platform or legal structure of Brookfield Office or fixed-charge coverage falls below 1.3x.<\/p><\/blockquote>\n<p>BPO has the following preferred share issues outstanding: BPO.PR.H, BPO.PR.J, BPO.PR.K, BPO.PR.L, BPO.PR.N, BPO.PR.P, BPO.PR.R, BPO.PR.T, BPO.PR.W, BPO.PR.X and BPO.PR.Y.<\/p>\n<p>Of greater concern is the potential for knock-on effects from BPO&#8217;s parent, Brookfield Asset Management (BAM), which has the following preferreds outstanding: BAM.PF.A, BAM.PF.B, BAM.PF.C, BAM.PF.D, BAM.PR.B, BAM.PR.C, BAM.PR.E, BAM.PR.G, BAM.PR.J, BAM.PR.K, BAM.PR.M, BAM.PR.N, BAM.PR.P, BAM.PR.R, BAM.PR.T, BAM.PR.X and BAM.PR.Z.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Standard and Poor&#8217;s has announced: While the company recently repaid debt to bolster its balance sheet before a large lease expiry, we expect fixed-charge coverage measures to remain low and debt-to-EBITDA to remain high for &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-22461","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/22461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=22461"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/22461\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=22461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=22461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=22461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}