Fitch rates Sovran notes BBB

Fitch Ratings said it assigned a BBB rating to the $600 million of 3.5% senior unsecured notes due 2026 issued by Sovran Acquisition LP, the operating partnership of Sovran Self Storage, Inc.

Sovran Self Storage will guarantee the notes, Fitch said.

Sovran Self Storage has an issuer default rating of BBB, BBB rating on its unsecured revolving credit facility and BBB rating on its unsecured term notes.

Sovran Acquisition has an issuer default rating of BBB, BBB rating on its unsecured revolving credit facility, BBB rating on its unsecured term notes and BBB rating on its unsecured bonds.

In May, Fitch said it placed Sovran's ratings on Rating Watch negative after news of the LifeStorage acquisition.

The negative watch reflects that the weakening of the company’s key credit metrics upon the closing of the LifeStorage acquisition, the agency said.

Execution risks also are expected to affect the company’s credit metrics, which offsets the headline improvements in its portfolio quality, Fitch said.

The LifeStorage portfolio is stronger than Sovran's existing portfolio as measured by asset age, rent per square foot and surrounding population demographics, which is a credit positive and could help narrow the quality gap between Sovran's portfolio and its public peers, the agency added.

Still, Fitch said it believes Sovran paid a premium price for the acquisition.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.