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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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From: John McCarthy	2/18/2008 9:22:38 PM
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iStar Financial outlook cut to negative, IDR affirmed at 'BBB' - Fitch February 18, 2008: 01:10 AM EST MUMBAI, Feb. 18, 2008 (Thomson Financial delivered by Newstex) -- Fitch Ratings said it downgraded its outlook on iStar Financial (NYSE:SFI PRD) (NYSE:SFI PRF) (NYSE:SFI PRG) (NYSE:SFI PRI) (NYSE:SFI PRE) (NYSE:SFI) Inc (SFI) to negative from stable citing the reduced capital availability in the commercial real estate debt capital markets and its potential impact on the company, among other reasons. The ratings agency affirmed the commercial real estate finance company's issuer default rating at 'BBB'; unsecured revolving credit facilities at 'BBB'; senior unsecured notes at 'BBB' and preferred stock rating at 'BB+'. The affirmation reflects SFI's largely unencumbered asset base and risk underwriting and management processes and the strength of SFI's franchise as a finance company focused on the commercial real estate sector, Fitch said. Fitch said its concerns about SFI center on reduced capital availability in the commercial real estate debt capital markets and its potential impact on the company. Given the slowdown in the unsecured debt markets, which has been SFI's primary source of debt capital funding over the last several years, the company is not likely to use that form of capital to address near-term debt maturities and future funding commitments for its existing loan portfolio, Fitch added. Fitch also noted that many of SFI's borrowers have historically sold assets or accessed the secured debt markets to repay SFI loans. Should borrowers find it more challenging to refinance their loans in the current environment, SFI's ability to meet its own debt maturities from loan principal repayments will be lessened, it added. Copyright Thomson Financial News Limited 2007. All rights reserved. money.cnn.com

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