The ratings reflect Fitch's comfort with the stability of the earnings generated by Archstone's national portfolio of well-located, well-leased, multifamily assets. Fitch also notes Archstone's relatively strong operating results through the current economic downturn.
Fitch acknowledges Archstone's modest use of enterprise leverage, as indicated by the ratios of total debt to undepreciated book capitalization of 43.2% and total debt-plus-preferred to undepreciated book capitalization of 45%, as of June 30.
Operating EBITDA covered interest expense 2.8 times for the 12 months ended June 30, down from 3.1 times at year-end 2002. Likewise, unencumbered net operating income covered unsecured interest expense by 2.8 times and unencumbered assets (at cost) covered unsecured debt by 2.2 times.
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