Moody’s revises Forest City view to positive

Moody's Investors Service said it revised Forest City Enterprises Inc.'s rating outlook to positive from stable and affirmed its outstanding B2 senior unsecured debt rating following improvement in coverage ratio and a favorable trend in its leverage metrics.

In the same action, the agency assigned shelf ratings to Forest City's new debt securities registration.

Moody’s said the positive outlook reflects improving trends in key credit metrics including fixed-charge coverage, secured leverage and net debt/EBITDA. The company has announced its intention to convert to a REIT, expected by Jan. 1, 2016. The transition plan includes additional non-core asset sales and proceeds will likely be used to pay down some of the outstanding debt.

These measures, if successfully executed, would meaningfully improve Forest City's leverage and credit profile, the agency said.

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