S&P rates Education Realty notes BBB-

Standard & Poor’s said it assigned a BBB- rating to Education Realty Operating Partnership LP’s $250 million debut senior unsecured notes due 2024.

The recovery rating is 2, which indicates 70% to 90% expected default recovery. The notes are fully and unconditionally guaranteed by parent company Education Realty Trust Inc.

The proceeds will be used to repay about $69 million in mortgage debt, pay down the outstanding balance on the company’s unsecured revolving credit facility and for general corporate purposes, the agency said.

The ratings reflect the company’s fair business risk profile, highlighted by high-quality assets, substantial appetite for development and relatively small scale, S&P said.

The company’s financial risk profile incorporates an expectation that fixed-charge coverage remains in the mid- to high-2x range by the end of both 2014 and 2015, the agency said.

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