Fitch Ratings affirmed National Retail Properties Inc.'s long-term issuer default rating at BBB+, with a stable outlook.
The ratings action incorporates predictable cash flows and long lease terms in the company's real estate portfolio, strong financial flexibility, high liquidity coverage and strong asset coverage of unsecured debt.
Specifically, for rentals that have leases of 15 to 20 years, annual rent bumps at the company tied to consumer price inflation average 1.5%. It also had a weighted average lease term of 11.4 years as of June 30, which Fitch considers strong for companies rated BBB.
The company's real estate investment trust leverage was 4.9x at the end of the second quarter, and Fitch expects to see a leverage in the low 5x range through 2020.
Fitch noted that the company only has modest same-store growth, which has essentially been flat over the previous two years amid vacancies, rent roll downs and impairment losses.