REIT Financial News - 28 JUN 2010: Moody's changes CCT's rating outlook to positive

Moody's changes CCT's rating outlook to positive. See:

• Press Release

Key Points

• Moody's Investors Service has today changed the rating outlook of CCT to positive from stable. 
• Moody's has affirmed CCT's Baa2 corporate family rating and Baa3 senior unsecured debt rating. 
• The change in outlook reflects CCT's demonstration of operational resiliency through the economic downturn, as evidenced by the high occupancy and decent rental growth of its Grade A office portfolio.
• The change in outlook further reflects CCT's improved capital structure, as it had successfully recapitalized its balance sheet -- through an equity issuance in June 2009 -- and its improving liquidity profile, including the increased use of medium-term unsecured financing.
• CCT's credit metrics have materially improved with Debt / EBITDA falling to 6.5x as of end of 1Q 2010 from 12x in 2008, and EBITDA/Interest increasing to 3.2x from 2.5x. CCT's level of encumbered asset also declined to 50% as of end of 1Q 2010 from its peak of 90% in 2008.
• CCT's current improved financial profile could weaken moderately due to continuing assets growth, the change in outlook factors in Moody's expectation that CCT's strategy to reconstitute its portfolio will enhance the quality of its property portfolio and thus its cash flow generation.

Author's Note
CCT closes at 1.22 today. In terms of closing price, this is the highest since around august 2008 after factoring in the rights issue.