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Moody's upgrades AvalonBay Communities

Moody's upgraded all of AvalonBay Communities Inc.'s ratings, highlighting the company's leadership position in the country's apartment REIT space.

Specifically, Moody's upgraded its ratings on the company's senior unsecured debt to A3 from Baa1; senior unsecured medium-term notes and senior unsecured shelf to (P)A3 from (P)Baa1; and subordinate shelf and preferred shelf to (P)Baa1 from (P)Baa2. Roughly $4.45 billion of securities are affected by the upgrade.

AvalonBay's strong credit profile, conservative balance sheet management and excellent liquidity position to meet near-term obligations were also cited as factors for the ratings upgrade.

"However, a key credit concern is AVB's exposure to certain core markets that are currently experiencing a deceleration in rental growth rates from their cyclical highs and elevated levels of new supply," Moody's noted.

The ratings outlook is stable, reflective of Moody's expectation that the AvalonBay management team will continue with its prudent balance sheet management strategy and substantial pre-funding of the company's development pipeline.