Fitch rates American Assets notes BBB

Fitch Ratings said it assigned a BBB rating to American Assets Trust, LP’s $100 million series E senior guaranteed notes due 2029 issued via private placement. The company has a BBB long-term issuer default rating, and its $250 million credit facility, $100 million term loan A, $100 million term loan B, $50 million term loan C and $600 million notes are rated BBB. The outlook is stable.

The company is the operating partnership of American Assets Trust, Inc.

The agency said the rating and stable outlook are based on American Assets' credit strengths, which include a portfolio focus on high barrier-to-entry U.S. West Coast markets that Fitch expects will result in growing cash flow in excess of fixed charges. Other strengths include appropriate leverage for the BBB rating achieved through organic delevering, good unencumbered asset coverage of unsecured debt and a long management track record.

Credit concerns cited by Fitch include the company's exposure to below-investment grade and unrated tenants, including the largest retail tenant, Kmart, which represented 6.6% of retail rent and 2.8% of total rent in the first quarter of 2017.

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