Fitch upgrades SL Green Realty

Fitch Ratings said it upgraded the credit ratings for SL Green Realty Corp. and its subsidiaries as follows:

• SL Green Realty: issuer default rating to BBB- from BB+, senior unsecured notes to BBB- from BB+ (as co-obligor) and perpetual preferred stock to BB from BB-;

• SL Green Operating Partnership, LP: issuer default rating to BBB- from BB+; unsecured revolving credit facility to BBB- from BB+, senior unsecured notes to BBB- from BB+, exchangeable senior notes to BBB- from BB+ and junior subordinated notes to BB+ from BB; and

• Reckson Operating Partnership, LP: issuer default rating to BBB- from BB+, senior unsecured notes to BBB- from BB+ (as co-obligor for certain issuances) and exchangeable senior debentures to BBB- from BB+.

The outlook was revised to stable from positive.

Fitch said the upgrades reflect the company's credit strengths, including its high-quality New York office portfolio, manageable lease maturity and debt expiration schedules, growing unencumbered asset pool and the company's improving credit metrics.

These positive elements are also supported by expectations for further strengthening in SL Green Realty’s fixed-charge coverage ratio. These positive elements are balanced by concerns regarding the Midtown Manhattan office leasing environment, which remains somewhat dependent on the growth of large financial institutions and supporting industries such as law and accounting firms, the agency said.

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