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I AGREE
21 Mar 2011
Approximately $6.4 bn of securities affected.
New York, March 21, 2011 -- Moody's Investors Service assigned a B1 senior secured rating to
iStar's senior secured facility Tranche A-1 and a B2 senior
secured rating to iStar's senior secured facility Tranche A-2.
Moody's also assigned a corporate family rating of B3 to iStar.
Additionally, Moody's upgraded iStar's senior unsecured
debt to Caa1 from Ca, and preferred stock to Caa3 from C.
This rating action follows the announcement that iStar closed on its $2.95
bn senior secured facility. This concludes Moody's review.
RATINGS RATIONALE
On March 17, 2011, iStar announced that it has entered into
a new $2.95 billion senior secured credit agreement providing
for two tranches of term loans: a $1.50 billion A-1
tranche due June 28, 2013, which bears interest at a rate
of LIBOR plus 3.75%, and a $1.45 billion
A-2 tranche due June 30, 2014, which bears interest
at a rate of LIBOR plus 5.75%. Both tranches include
a LIBOR floor of 1.25%.
As previously outlined to Moody's, the proceeds from the new
financing will be used to refinance iStar's existing secured bank facilities
due in June 2011 and 2012, to repay a portion of iStar's unsecured
debt maturing in 2011 and for other corporate purposes. Outstanding
borrowings under the new financing will be collateralized by a first lien
on a fixed pool of approximately $3.69 billion of assets
consisting primarily of performing loans and CTLs. The financing
provides for minimum cumulative amortization requirements on the A-1
tranche as follows: $200.0 million by December 30,
2011, $450.0 million by June 30, 2012,
$750.0 million by December 31, 2012 and $1.50
billion by June 28, 2013. The A-2 tranche will begin
amortizing after the repayment in full of the A-1 tranche,
with minimum cumulative amortization payments of $150.0
million due six months after payment in full of the A-1 tranche,
and additional payments of $150 million due by each six month anniversary
thereafter until maturity. The new credit agreement contains a
covenant to maintain collateral coverage of not less than 1.25x
outstanding borrowings.
The new senior secured credit facilities ratings, the corporate
family rating, and the upgrades of iStar's existing ratings are
based on the REIT's success in extending near term debt maturities.
The ratings on the new senior secured credit facilities take into account
the asset coverage, the size and quality of the collateral pool,
the pace of amortization on each tranche and the term of each tranche.
The stable rating outlook reflects iStar's extended debt maturity
schedule, stabilizing asset portfolio, and management's
demonstrated ability to manage its liquidity.
Positive rating momentum would result from successful repayment or refinancing
of debt maturities through 2013, resolution of non-performing
assets and sustained earnings growth.
Negative rating pressure could result should the REIT fail to achieve
resolutions of its non-performing assets at or above the current
carrying value. Any liquidity challenges or covenant breaches would
lead to a downgrade.
The following ratings were assigned:
iStar Financial Inc. - Senior secured credit facility Tranche
A-1 at B1, Tranche A-2 at B2; corporate family
rating at B3
The following ratings were upgraded:
iStar Financial, Inc. -- Senior unsecured debt
to Caa1 from Ca; preferred stock to Caa3 from C; senior debt
shelf to (P)Caa1 from (P)Ca; subordinated debt shelf to (P)Caa3 from
(P)C; preferred stock to Caa3 from C; preferred stock shelf
to (P)Caa3 from (P)C.
Moody's last rating action with respect to iStar Financial Inc.
was on February 24, 2011 when Moody's assigned (P)B1/(P)B2 senior
secured ratings, (P)B3 corporate family rating, and placed
iStar's senior unsecured and preferred ratings on review for possible
upgrade.
iStar Financial's ratings were assigned by evaluating factors we believe
are relevant to the credit profile of the issuer, such as i) the
business risk and competitive position of the company versus others within
its industry, ii) the capital structure and financial risk of the
company, iii) the projected performance of the company over the
near to intermediate term, and iv) management's track record and
tolerance for risk. These attributes were compared against other
issuers both within and outside of iStar's core industry and the company's
ratings are believed to be comparable to those of other issuers of similar
credit risk.
iStar Financial Inc. [NYSE: SFI] is a property finance
company that elects REIT status. iStar provides structured mortgage,
mezzanine and corporate net lease financing. iStar Financial is
headquartered in New York City, and had assets of $9.2
billion and common shareholders' equity of $1.1 billion
as of December 31, 2010.
REGULATORY DISCLOSURES
Information sources used to prepare the credit rating are the following:
parties involved in the ratings, public information, confidential
and proprietary Moody's Investors Service information.
Moody's Investors Service considers the quality of information available
on the issuer or obligation satisfactory for the purposes of maintaining
a credit rating.
Moody's adopts all necessary measures so that the information it uses
in assigning a credit rating is of sufficient quality and from sources
Moody's considers to be reliable including, when appropriate,
independent third-party sources. However, Moody's
is not an auditor and cannot in every instance independently verify or
validate information received in the rating process.
Please see ratings tab on the issuer/entity page on Moodys.com
for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to
a time before Moody's Investors Service's Credit Ratings were fully digitized
and accurate data may not be available. Consequently, Moody's
Investors Service provides a date that it believes is the most reliable
and accurate based on the information that is available to it.
Please see the ratings disclosure page on our website www.moodys.com
for further information.
Please see the Credit Policy page on Moodys.com for the methodologies
used in determining ratings, further information on the meaning
of each rating category and the definition of default and recovery.
New York
Karen Nickerson
VP - Senior Credit Officer
Commercial Real Estate Finance
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
New York
Maria Maslovsky
Asst Vice President - Analyst
Commercial Real Estate Finance
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Investors Service
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's assigns B1/B2 to iStar Financial's new senior secured facility; B3 corporate family rating; upgrades senior unsecured to Caa1 and preferred stock to Caa3
No Related Data.
© 2018 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved. CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE. MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.
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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.” Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. 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MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000. MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
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