Moody's cuts Glimcher preferreds to B2

Moody's Investors Service said it lowered the preferred equity rating for Glimcher Realty Trust to B2 from B1 and maintained its negative outlook.

The agency said the apparent resolution of Glimcher's credit facility, an offering of approximately $100 million of common equity and the agreement to sell the Lloyd Center mall for net proceeds of $60 million in proceeds were critical in terms of shoring up the REITs very uncertain liquidity position. Without these steps, Moody's would likely have lowered the preferred rating by more than one notch.

However, Glimcher remains in a tight liquidity position, with no unencumbered assets and no available capacity on its shrinking line of credit, Moody's said. The company is committed to reducing leverage, but in the meantime its leverage metrics are high with effective leverage at 76% and net debt at 9.6 times EBITDA, the agency said.

The negative outlook reflects Moody's very cautious view of retail and the American consumer despite reports that a bottom may be developing in the economy.

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