On Friday, Fitch Ratings upgraded the investment-grade credit rating of Sovran Self Storage, a Williamsville, N.Y.-based real estate investment trust. Fitch had downgraded the company’s rating in May after Sovran experienced some trouble with the covenants in its loan agreements. But earlier this month, Sovran raised $114 million by selling additional shares of its stock, reducing its debt and overall leverage.
The company also cut its dividend by 30 percent and is saving cash by trimming its facility expansion and upgrade program. The Fitch upgrade should have significant financial benefit for Sovran. The interest savings from the upgrade are expected to offset the dilution to the company’s earnings per share caused by the sale of the additional 4 million shares of stock.
Sovran owns or manages 382 Uncle Bob’s Self Storage facilities in 24 states.
Source: Buffalo Business News, Sovran’s credit rating upgraded
Sovran Self Storage Updates Financial Guidance for 2009
Sovran Self Storage Offers 3M Shares of Common Stock
Fitch Downgrades and Places Sovran Self Storage on Rating Negative ...
Fitch Issues Credit-Analysis Report on Sovran Self Storage Ratings