The median liquidity coverage ratio for select U.S. equity real estate investment trusts (REITs) is estimated to be 1.1 times (x) from July 1, 2011 to Dec. 31, 2013, compared with 1.4x from April 1, 2011 to Dec. 31, 2012, according to Fitch Ratings in a new special report.
Industrial REITs are the sole property sector with a median liquidity coverage ratio below 1.0x, at 0.7x as of June 30, 2011, due principally to sizeable debt maturities through Dec. 31, 2013. Conversely, as of June 30, 2011, healthcare REITs had the strongest sector median at 2.1x, followed by office at 1.2x, multifamily at 1.1x, and retail at 1.0x.
Since March 2011, when REIT credit cash spreads were at their tightest level year-to-date, spreads have widened over 100 basis points (bps). Although spreads remain over 1,000 bps tighter than at year-end 2008, a fragile economy and sovereign debt concerns have contributed to a modest widening. Trends offsetting REIT credit spread widening include improving revolving line of credit availability, generally solid access to capital, and steady contingent liquidity.
The report is titled, '2Q11 U.S. Equity REIT Liquidity Update: Wading a Little Deeper' and is available at 'www.fitchratings.com'.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Corporate Rating Methodology,' Aug. 12, 2011;
--'Rating Hybrid Securities,' July 28, 2011;
--'Treatment of Hybrids in Corporate and REIT Credit Analysis,' July 11, 2011;
--'Recovery Rating and Notching Criteria for Equity REITs,' May 12, 2011;
--'Criteria for Rating U.S. Equity REITs and REOCs,' March 15, 2011.
Applicable Criteria and Related Research: 2Q11 U.S. Equity REIT Liquidity Update: Wading a Little Deeper
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=650537
Criteria for Rating U.S. Equity REITs and REOCs
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=610687
Corporate Rating Methodology
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647229
Rating Hybrid Securities
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=647091
Treatment of Hybrids in Corporate and REIT Credit Analysis
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=642132
Recovery Rating and Notching Criteria for Equity REITs
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=628490
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
Contacts:
Fitch, Inc.
Steven Marks, +1-212-908-9161
Managing Director
Fitch,
Inc.
One State Street Plaza
New York, NY 10004
or
Sean
Pattap, +1-212-908-0642
Senior Director
or
Media Relations
Sandro
Scenga, +1-212-908-0278 (New York)
sandro.scenga@fitchratings.com