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Moody's upgrades Boston Properties, revises outlook

Moody's upgraded its ratings on office real estate investment trust Boston Properties Inc. and revised the ratings outlook to stable from positive.

Specifically, the rating agency upgraded Boston Properties' preferred stock rating to Baa2 from Baa3; its senior unsecured debt shelf rating to (P)Baa1 from (P)Baa2; and the ratings on its subordinate debt shelf, preferred shelf and preferred shelf noncumulative to (P)Baa2 from (P)Baa3.

Moody's also upgraded Boston Properties LP's senior unsecured debt rating to Baa1 from Baa2, senior unsecured debt shelf rating to (P)Baa1 from (P)Baa2 and subordinate debt shelf rating to (P)Baa2 from (P)Baa3.

The rating agency said the action takes into account Boston Properties' "large and high quality" office portfolio, "moderate" leverage profile and robust fixed-charge ratio.

According to Moody's, the company's moderate dividend payout ratio, unencumbered property portfolio and significant capacity on its revolver offer "meaningful financial flexibility" to finance its development pipeline and invest in maintenance and repositioning projects.

The stable outlook, meanwhile, takes into account Moody's expectation for the company to maintain its leverage metrics and liquidity at current levels or better.