Fitch affirms Highwoods Properties

Fitch Ratings said it affirmed Highwoods Properties, Inc.'s issuer default rating at BBB- and preferred stock at BB, and Highwoods Realty LP's issuer default rating at BBB-, unsecured revolving credit facility at BBB- and senior unsecured notes at BBB-.

The outlook is stable.

The affirmation reflects the company's credit strengths, including its manageable debt maturity and lease expiration schedules, granular tenant base and the company's maintenance of leverage and coverage ratios appropriate for the rating category, despite the weak operating environment, the agency said.

The outlook reflects Highwood's strong liquidity and unencumbered asset coverage of unsecured debt, offset by expected soft property-level fundamentals, the agency noted.

Highwoods' net debt divided by recurring operating EBITDA was 5.6x for the 12 months ended June 30, compared with 5.8x and 6.5x during 2009 and 2008, respectively.

The economic recovery remains fragile, with the high unemployment rate continuing to hurt the business prospects of many of Highwoods' tenants, the agency said.

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