{"id":41749,"date":"2020-12-17T18:50:10","date_gmt":"2020-12-17T23:50:10","guid":{"rendered":"http:\/\/prefblog.com\/?p=41749"},"modified":"2020-12-17T18:50:10","modified_gmt":"2020-12-17T23:50:10","slug":"ax-under-review-negative-by-dbrs","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=41749","title":{"rendered":"AX Under Review-Negative By DBRS"},"content":{"rendered":"<p>DBRS <a href=\"https:\/\/www.dbrsmorningstar.com\/research\/371569\/dbrs-morningstar-places-artis-reits-ratings-of-bbb-lowpfd-3-low-under-review-with-negative-implications\">has announced<\/a> that it:<\/p>\n<blockquote><p>placed Artis Real Estate Investment Trust\u2019s (Artis or the REIT) Issuer Rating and Senior Unsecured Debentures rating of BBB (low) and Preferred Trust Units rating of Pfd-3 (low) Under Review with Negative Implications. These rating actions reflect DBRS Morningstar\u2019s expectation that the announcement of Artis\u2019 current management team leaving the REIT may have a negative impact on its credit risk profile and may impair its ability to reduce leverage in a timely manner.<\/p>\n<p>Artis announced an agreement through which certain members of the management team, including the chief executive officer (CEO) and the chief financial officer (CFO), are stepping down as a result of activist unitholder (the Sandpiper Group) pressure. Sandpiper has been advocating against Artis for the spinoff of its retail portfolio, cutting costs, and increasing distributions to unitholders as well as other initiatives. The REIT also announced the reconstitution of its board and a new interim CEO, who is also the CEO of Sandpiper. DBRS Morningstar notes that Artis had been engaged in a strategic debt reduction initiative, including the retail portfolio spinoff, that had the potential to stabilize Artis\u2019 credit profile within an acceptable time frame (see DBRS Morningstar\u2019s commentary \u201cArtis REIT\u2019s Proposed Spin-Off and Debt Reduction Could Stabilize Rating Trend,\u201d dated September 9, 2020).<\/p>\n<p>As a result of the uncertainty created by the change in management, DBRS Morningstar is placing Artis\u2019 ratings Under Review with Negative implications. As part of its review, DBRS Morningstar will determine the new management team\u2019s commitment to and updated plans for lowering leverage. Should DBRS Morningstar determine that the REIT\u2019s successful reduction of leverage is likely, DBRS Morningstar would likely change the trend for Artis\u2019 ratings to Stable upon completion of the review. Conversely, DBRS Morningstar would likely take a negative rating action on Artis\u2019 ratings should it determine that management is unlikely to reduce total debt-to-EBITDA ratio below 9.8 times (x) or increase EBITDA interest coverage above 2.70x.<\/p><\/blockquote>\n<p>Affected issues are AX.PR.A, AX.PR.E and AX.PR.I.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>DBRS has announced that it: placed Artis Real Estate Investment Trust\u2019s (Artis or the REIT) Issuer Rating and Senior Unsecured Debentures rating of BBB (low) and Preferred Trust Units rating of Pfd-3 (low) Under Review &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-41749","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/41749","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=41749"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/41749\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}