Easterly Government Properties Receives Investment Grade Credit Rating
- None.
- None.
Insights
The BBB rating awarded to Easterly Government Properties by KBRA signifies a stable investment prospect with a moderate chance of default. This is a pivotal development for the firm, as it can now access capital markets at more favorable terms. The stable outlook further indicates that the company's financial position is expected to remain consistent in the foreseeable future.
From an investor's perspective, the enhanced credit rating could translate into lower yield spreads on bonds issued by Easterly, reflecting investor confidence in the company's ability to meet its financial commitments. Moreover, this rating could potentially lead to an expansion of the investor base, including more conservative fixed-income investors seeking stable returns with minimal risk.
It is important to note that the rating is underpinned by the company's robust lease income, primarily sourced from the U.S. Government, which holds a AAA rating from KBRA. This demonstrates a high level of security in the company's cash flow, given the government's creditworthiness and the critical nature of the facilities leased.
The investment grade rating of BBB with a stable outlook is an indicator of Easterly's strong position within the real estate sector, particularly in the niche market of properties leased to government agencies. The company's focus on mission-critical government facilities is a strategic advantage, as these assets typically feature long-term leases and stable occupancy rates, contributing to predictable revenue streams.
Additionally, the rating could enhance Easterly's competitive positioning by facilitating the acquisition of similar assets at competitive rates, thereby reinforcing its market presence. With an investment grade rating, the company is better equipped to execute its growth strategy through property acquisitions and development, financed by debt at lower interest rates. This is a crucial factor for the company's long-term growth and sustainability in a capital-intensive industry.
Easterly Government Properties' inaugural BBB rating by KBRA is a testament to its solid tenancy agreements, primarily with the U.S. Government. This rating is particularly significant for a REIT, as it underlines the quality and stability of the rent roll, which is a key determinant of the REIT's performance. The stable outlook suggests that the company's operational and financial metrics are well-aligned with industry benchmarks for a mid-tier credit rating.
For existing and potential shareholders, the investment grade rating may signal a lower risk profile for the REIT, which could influence the stock's risk premium and potentially its valuation. The company's intent to leverage this rating to drive shareholder value is indicative of a proactive approach to capital management, which is crucial for maintaining a healthy balance sheet amidst varying market conditions.
Reflective of its Superior Tenancy and Investment Grade Balance Sheet, Easterly Achieves Inaugural BBB Rating with Stable Outlook
“Receiving this investment grade rating from KBRA is reflective of the strong underlying credit quality of our cashflows and the secure balance sheet we have built at Easterly Government Properties,” stated Allison Marino, Easterly’s Chief Financial Officer and Chief Accounting Officer. “With approximately
“We are pleased KBRA recognizes the strength of our balance sheet supported by leases of mission critical facilities to government agencies with an enduring mission,” said Darrell Crate, Chief Executive Officer of Easterly Government Properties. “We expect to use this rating to expand our capital base and support earnings growth for our shareholders.”
About Easterly Government Properties, Inc.
Easterly Government Properties, Inc. (NYSE:DEA) is based in
This press release contains forward-looking statements within the meaning of federal securities laws and regulations. These forward-looking statements are identified by their use of terms and phrases such as “believe,” “expect,” “intend,” “project,” “anticipate,” “position,” and other similar terms and phrases, including references to assumptions and forecasts of future results. Forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results to differ materially from those anticipated at the time the forward-looking statements are made. These risks include, but are not limited to, those risks and uncertainties associated with our business described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on February 28, 2023. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that the expectations will be attained or that any deviation will not be material. All information in this release is as of the date of this release, and we undertake no obligation to update any forward-looking statement to conform the statement to actual results or changes in our expectations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240111926024/en/
Easterly Government Properties, Inc.
Lindsay S. Winterhalter
Senior Vice President, Investor Relations & Operations
202-596-3947
ir@easterlyreit.com
Source: Easterly Government Properties, Inc.
FAQ
What is Easterly Government Properties' ticker symbol?
What rating did Easterly Government Properties achieve from KBRA?
Where does approximately 99% of Easterly Government Properties' annualized lease income come from?
Who is Easterly Government Properties' Chief Financial Officer and Chief Accounting Officer?
Who is Easterly Government Properties' Chief Executive Officer?
