Fitch lowers Washington Prime

Fitch Ratings said it downgraded the ratings of Washington Prime Group, Inc. and its operating partnership, Washington Prime Group LP, including their long-term issuer default rating to BB+ from BBB-.

The outlook on both companies is negative.

The downgrades reflect continuing weakness in the companies' operating performance, primarily due to the secular shift in retail distribution towards e-commerce and Omni-channel retailing, Fitch said.

The shift is reducing tenant demand for physical space, particularly for less productive properties in weaker demographic trade areas, the agency said.

The downgrades also reflect weaker secured mortgage availability for class B malls generally and deterioration in Washington Prime's unencumbered asset coverage of unsecured debt, Fitch said.

The negative outlook reflects an expectation that operating performance trends will endure in the near-to-medium term, putting pressure on its cash flows and capital access, the agency said.

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