Fitch rates American Assets loans, notes BBB

Fitch Ratings said it assigned an initial issuer default rating of BBB to American Assets Trust, Inc. and its operating partnership, American Assets Trust, LP.

The agency also assigned BBB ratings to American Assets Trust, LP’s $250 million unsecured credit facility, $100 million unsecured term loan and $350 million unsecured notes.

The outlook is stable.

The ratings reflect the company’s credit strengths, which include a portfolio of high entry-barrier U.S. west coast markets, Fitch said.

This focus is expected to result in growing cash flows in excess of fixed charges and appropriate leverage for a BBB rating, the agency said.

The ratings also consider the company’s good liquidity position and long management track record, Fitch said.

Credit concerns include the company’s exposure to junk-grade and unrated tenants, including the largest retail tenant, Kmart, which represented 6.2% of retail rent and 2.7% of total rent in the first quarter of 2015, the agency said.

The company continues its evolution toward a more unsecured funding model, Fitch added.

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