s&p places negative credit watch on gmg

MELBOURNE (Standard & Poor's) May 27, 2009--Standard & Poor's Ratings Services
today said that it had placed its long-term 'BBB' corporate credit and debt
ratings on Goodman Group on CreditWatch with negative implications. The
CreditWatch placement reflects our concern that Goodman has reduced access to
capital, given the challenging conditions in global debt markets and continued
weakness in Goodman's stapled equity price.
"Although Goodman's management team is currently in discussions with
additional strategic investors about securing long-term capital, we believe
that the group's capital structure remains aggressive," Standard & Poor's
credit analyst Craig Parker said. "Moreover, we believe the recent addition of
a short-term secured finance facility does not alleviate the group's long-term
funding pressures."
The long-term rating on Goodman continues to be supported by the property
group's strong Australasian market position, relatively stable rental income
stream, and track record of accessing third-party capital to expand its
investment and funds-management activities. The strengths are tempered by the
group's high debt levels for the rating and exposure to more-volatile property
development earnings and asset sales.
Mr. Parker added: "Downward pressure on the long-term rating may follow:
a protracted execution of its capital-market initiatives; a more severe
weakening in the industrial and office-park markets that further depresses the
group's earnings; or if Goodman encounters significantly higher costs or
lender resistance associated with near-term debt rollovers. We expect more
visibility on these potential events in the next three months. The rating
would likely be affirmed if the group significantly improves its financial and
liquidity profile, including a successful extension of its debt-maturity
profile, and maintains adequate committed debt facilities to meet forthcoming
capital commitments and debt maturities."