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DBRS puts Artis under review
DBRS said it placed Artis Real Estate Investment Trust’s 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 the expectation that Artis’ current management team leaving may hurt its credit risk profile and may impair its ability to promptly reduce leverage.
Artis reported an agreement through which certain management members, including the chief executive officer and the chief financial officer, are resigning as a result of unitholder Sandpiper Group’s pressure. Sandpiper has been advocating against Artis for its retail portfolio's spinoff, cutting costs and increasing distributions to unitholders and other initiatives, DBRS said.
Artis also announced the reconstitution of its board with Sandpiper’s CEO as the new interim CEO.
DBRS noted the company had been engaged in a debt reduction initiative, including the retail portfolio spinoff, that had the potential to stabilize Artis’ credit profile within an acceptable time frame
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