Fitch Downgrades Colonial Properties

Fitch Ratings has downgraded the issuer default ratings of Colonial Properties Trust, Birmingham, Ala., stating the company's first quarter operating results and the expectations for the performance of its property portfolio in 2009-2010 make its creditworthiness more consistent with a 'BB+' rating. "The rating action also reflects the fact that secured debt increased materially, with secured debt-to-total debt rising to 26% as of March 31, 2009 from 5.9% as of Dec. 31, 2008. Fitch anticipates that the position of bondholders may further weaken over the next 12-24 months in the event that the company continues to fund unsecured debt maturities with new secured debt funding," the rating agency said. Colonial was given a stable outlook rating based on its manageable debt maturity schedule and good liquidity position, which was recently bolstered by a $350 million secured credit facility originated by PNC ARCS LLC for repurchase by Fannie Mae.