(FR) Fitch Upgrades First Industrial Realty Trust Credit Rating

Fitch Ratings, the global credit rating firm, has recently upgraded the credit rating of First Industrial Realty Trust, Inc. (FR), a real estate investment trust (REIT), based on its improved long-term credit profile and strong liquidity. The company is currently rated as “BB”, which is significantly up from its previous “B+” rating and denotes a stable outlook with considerable improvement in its balance sheet.

While raising First Industrial’s credit rating, Fitch has considered its high quality asset portfolio, better operating performance of late, strong liquidity, adequate debt service coverage, manageable debt maturity schedule, and its ability to access capital from varied sources.

Earlier, Fitch had a negative rating on the company as it was anticipated to fail to comply with its financial covenants. However, First Industrial rallied back strongly from a seemingly precarious financial condition by reducing its debt through a series of stock issuance. The company raised about $100 million worth of capital from a secondary offering in March 2011 and priced another equity offer of 8.4 million shares at $12.15 each at the beginning of the current month.

In addition, the company also augmented the overall quality of its portfolio by selling non-core assets and further increasing its liquidity. The company expects to meet both its short-term and long-term liquidity needs with proceeds from asset sale, the issuance of additional secured debt, and through continued equity issuance.

First Industrial owns and operates industrial real estate assets and provides supply chain solutions to multinational corporations and regional customers that range from 1,000 square feet to over 1 million square feet in leading industrial markets.

Since its inception in 1994, the company has developed a niche in offering premier industrial space across major markets in North America, including bulk and regional distribution centers, light industrial and other industrial facility types.

We presently have a ‘Neutral’ rating on First Industrial, which currently has a Zacks #3 Rank that translates into a short-term ‘Hold’ recommendation and indicates that the stock is expected to perform in line with the overall U.S. equity market for the next 1-3 months. We also have a ‘Neutral’ recommendation and a Zacks #3 Rank for Duke Realty Corp. (DRE), a competitor of First Industrial.

DUKE REALTY CP (DRE): Free Stock Analysis Report

FIRST INDL RLTY (FR): Free Stock Analysis Report

Zacks Investment Research

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