Fitch rates Equity Office notes BBB+

Fitch Ratings assigned a BBB+ rating to the recent $1 billion offering of 4.75% senior unsecured notes due 2014 issued by EOP Operating LP, the principal operating subsidiary of Equity Office Properties Trust and confirmed its BBB+ rating for EOP Operating Partnership's outstanding $8.4 billion senior unsecured obligations and its BBB rating for Equity Office Property Trust's outstanding $326 million convertible and perpetual preferred stock. The outlook is stable.

The ratings reflect the strength and stability of the earnings generated by EOP's portfolio of more than 700 office and industrial properties comprising approximately 130 million square feet, Fitch said. EOP's portfolio of leased properties is geographically diverse, located in 18 states and the District of Columbia which reduces its vulnerability to specific market risks and contributes to the predictability of EOP's earnings stream.

Despite the recent economic downturn and its resulting pressure on office rental rates and occupancy, EOP's assets continue to provide cash flow support for unsecured borrowings at the BBB+ rating category, albeit at levels reflective of a cyclical trough, Fitch said. Earnings generated by EOP's unencumbered assets afford enhanced coverage of unsecured debt service requirements when compared to total portfolio earnings coverage of total debt service.

Further, EOP's pool of assets unencumbered by mortgages provides EOP with significant financial flexibility to repay or, refinance borrowings when due, Fitch noted. Likewise, EOP's leverage is consistent with the rating category and marginally lower for the year ended Dec. 31, 2003. Of EOP's $1.4 billion in debt maturing in 2004, approximately 40% will have been addressed upon the closing of EOP's recently announced, $1 billion bond offering. The offering will also free up capacity under EOP's line of credit adequate to address the remainder of its 2004 debt maturities.

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