Moody's downgraded all the ratings of CBL Properties, formerly known as CBL & Associates Properties Inc., and also withdrew CBL's Baa3 issuer rating.
Ratings that were downgraded are the company's senior unsecured debt to (P)Ba1 from (P)Baa3 and the preferred shelf to (P)Ba2 from (P)Ba1. The senior unsecured debt rating of its operating subsidiary, CBL & Associates LP, was also downgraded to Ba1 from Baa3, along with the senior unsecured debt shelf to (P)Ba1 from (P)Baa3.
The ratings outlook remains negative.
The ratings downgrade echoes the company's weaker-than-projected operating performance in recent quarters and its lowered forecasts for 2018. The rating agency anticipates CBL's already-high leverage to increase further due to sustained pressure on earnings amid a progressively challenging retail environment.
The negative ratings outlook reflects Moody's opinion that the operating pressures could be worsened by the challenging retail environment, especially for mall operators such as CBL.
Moody's anticipates CBL's operating performance to be more vulnerable than other retail REIT peers to further decline, as its lower-productivity malls face a greater risk of possible tenant bankruptcies and store closings.
Moody's also believes that the company's liquidity position could be further pressured as the pool of properties requiring redevelopment spending increases.