Fitch Rates Westfield A-

The A- rating affected $500 million Guaranteed Senior Floating-Rate Notes due 2007; $700 million on 4.37% Guaranteed Senior Notes due 2010; $1.4 billion in 5.12% Guaranteed Senior Notes due 2014; 600 million euros Guaranteed 3.62% Notes due 2012; and 600 million British Pound Guaranteed 5.50% Notes due 2017.

The rating service said the ranking reflects Sydney, Australia-based REIT's strong presence in many US metropolitan markets and its leading regional mall position in Australia. Strong occupancy levels of more than 99% in Australia, New Zealand, and the U.K. and more than 94% in the US also were factors in the decision.

Westfield, whose managing director is Peter Lowy, owns 12 malls in the Los Angeles area, seven around Chicago and five in the New York City region and is currently negotiating the purchase of 12 department stores in its US portfolio that are slated sale as a result of the $11-billion merger between Federated Department Stores and May Department Store Co. The firm also expects to close on the $143 million purchase of the 1.3-million-sf Sunrise Mall in Massapequa, NY by the end of the year.

Fitch said the company's dominant market position combined with its strong and experienced management team, will provide a stable and resilient income stream over the long term and reduce its portfolio volatility. Westfield's lease maturity schedule, enhanced by different major tenants in its US and Australian enterprises, will insulate the company from economic downturns and major tenant bankruptcies in either country, providing for stable, long-term growth.

Fitch also said it expects the firm's leverage to remain stable over the long term, based on an announcement by Westfield management that the company plans to maintain its leverage ratio in the mid 40% range. As of Dec. 31, 2004, the company had a leverage rate of 40.6%. Westfield's debt maturity schedule, which allows for no more than 17% of total indebtedness to mature in a calendar year, also makes for a strong liquidity profile, the rating service said.

While Westfield's outlook remains positive, Fitch said there are some concerns. Fears that the robust retail environment may run out of steam, especially in the US, along with Westfield's relatively low unencumbered asset coverage, could prove problematic, the rating service noted.

Although Fitch said it expects Westfield to perform well, it said the company's acquisitions in Australia will be limited, making it more likely that much of the firm's expansion will be through its existing global assets and its acquisitions in the US and other markets.