Moody's revises Corporate Office outlook to positive

Moody's Investors Service said it affirmed the senior unsecured ratings of Corporate Office Properties, LP. The outlook was revised to positive from stable.

The agency said the positive outlook reflects the company’s significant improvement in lowering overall leverage while maintaining strong fixed charge coverage and a high quality unencumbered pool.

The REIT's current rating and outlook reflects the company’s continued progress in improving its capital structure. During the second quarter, the REIT paid down $200 million of term debt and redeemed its series L preferred shares. As a result of these capital transactions, net debt to EBITDA was slightly elevated at 6.5x at quarter-end.

Moody's said it expects this credit metric to be closer to 6x by year-end, consistent with management's commitment to operating with conservative leverage metrics. Similarly, effective leverage (debt plus preferred as a % of gross assets) was 44.2% at 2Q17, down from 50.7% at 2Q16.

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