Moody’s upgrades ERP notes to A3

Moody's Investors Service said it upgraded the senior unsecured notes of Equity Residential's operating partnership, ERP LP, to A3 from Baa1 and revised the outlook to stable from positive.

Concurrently, the agency affirmed ERP’s P-2 commercial paper rating.

Moody’s said the upgrade was primarily driven by strong credit metrics at Equity Residential and an improved portfolio of multifamily assets in high barrier to entry markets, which together produce a steady earnings stream.

The stable outlook reflects the agency’s expectation of stable to modestly improving cash flow metrics over the next 18 to 24 months despite expected operating weakness over the same time period due to elevated levels of supply and weaker demand in certain markets.

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