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Fitch lowers CBL & Associates ratings

Fitch Ratings lowered the long-term issuer default ratings of CBL & Associates Properties Inc. and its operating partnership to B- from BB-, with a negative outlook.

The rating agency also downgraded the mall landlord's long-term senior unsecured rating to B- from BB-, with a recovery rating of RR4, and its long-term senior secured rating to BB- from BB+, with a recovery rating of RR1. It lowered CBL & Associates LP's long-term preferred rating to CCC from B with a recovery rating of RR6.

Fitch said the action is based on its view that CBL's contingent liquidity weakened such that the company's financial metrics warrant comparison to the broader corporates universe versus real estate investment trust peers.

The rating agency noted that CBL has limited to no access to attractively priced unsecured bond capital, or the public equity markets, adding that the company's access to nonbank unsecured debt capital is poor relative to peers based on existing bond yields.

Fitch expects exposure to weaker-performing retailers to continue to put pressure on CBL's property-level fundamentals and challenge the company's ability to maintain its portfolio and performance metrics.

The negative outlook takes into account Fitch's expectation that CBL's cash flows and capital access will continue to face pressure from the aforementioned trends in the near-to-medium term.