Moody's assigns Sun Communities Baa3

Moody's Investors Service said it assigned a first-time Baa3 issuer rating to Sun Communities Operating LP, the operating subsidiary of Sun Communities, Inc.

“Moody's Baa3 issuer rating incorporates Sun Communities' dominant size and scale as the industry leading owner and operator of manufactured homes, RV resorts and marinas, supported by a low leveraged balance sheet with strong fixed charge coverage and ample funding sources to support growth. Sun Communities' portfolio has a solid occupancy rate, low operating expenses and capital expenditure requirements, and good embedded growth through rental increases,” the agency said in a press release.

Sun’s reliance on secured debt, its comparatively low unencumbered portfolio compared to same rated peers and geographic concentration with over 50% of the portfolio located in Florida and Michigan offset its credit strengths, Moody’s said.

The outlook is stable. The outlook reflects Sun’s large scale and good operational performance, Moody’s said.

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