Atrium European Real Estate Limited

EANS-News: Atrium European Real Estate Limited
CREDIT RATING UPDATE

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Company Information

St Helier Jersey / Channel Islands (euro adhoc) - CREDIT RATING UPDATE

Jersey, 31 January 2011. Atrium European Real Estate Limited   ("Atrium"  or  the "Company") (VSE/ Euronext: ATRS), one  of  the   leading  real  estate  companies focused on shopping centre investment, management  and  development  in  Central and Eastern Europe, notes  Standard  and  Poor´s  ("S&P")  announcement  placing Company's current 'BB' long-term and 'B' short-term corporate credit ratings  on CreditWatch Negative.  S&P  had  previously  upgraded   the  Company´s  long-term corporate credit rating to `BB´ from `BB-` with a Stable  outlook  and  affirmed Atrium´s Short-term rating as `B´ on 26 November 2010.

The Company notes that the CreditWatch Negative is not  a  comment   of  Atrium's underlying real estate  business  with  S&P  stating   that  "Atrium's  operating performance has improved over  the  past   12  months,  as  a  result  of  higher occupancy rates and a long lease maturity  profile  (about  five  years),  which have led to improvements in its operating margins" and  that  "Atrium's  capital structure has,  in  our  view,  strengthened  through  the  combined effect  of deleveraging and operating efficiency,  resulting  in  a   ratio  of  funds  from operations to debt of over 11%".  The CreditWatch reflects S&P's concerns  about the potential effects  of the  ongoing,  complex  litigation  with  Meinl  Bank ("Meinl") which S&P believes "could have an adverse bearing on  Atrium's  credit quality".  It is also because the Company did not provide S&P  with   information regarding a withheld  payment  of  a  de  minimus  amount of  interest  due  on EUR20 million nominal value of  its  2008   10.75%  Convertible  bond (the "Meinl Bond"), a private and unrated bond issued to Meinl.

Atrium did not provide disclosure of this non-payment to S&P as the Company  did not consider that such a disclosure was required because of the  private  nature of the Meinl Bond and because the interest   due  on  the  Meinl  Bond  had  been legitimately  withheld,   reflecting  as  it  does  a  matter  under  bona    fide commercial dispute, pending the  outcome  of  a  EUR2  billion  legal  action for compensation and damages filed  against  Julius  Meinl,  Meinl   Bank  and other defendants in August 2010, which the Company will pursue vigorously, as well  as other disputes.

S&P has stated that it intends to review the CreditWatch placement in 90 days, during which time Atrium will meet with S&P to listen to its concerns in more detail and use its best endeavours to ensure that the CreditWatch Negative is lifted as soon as possible.

For further information:

Financial Dynamics:                    +44 (0)20 7831 3113
Richard Sunderland
Laurence Jones
Will Henderson
richard.sunderland@fd.com

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Further inquiry note: Financial Dynamics, London Richard Sunderland  / Laurence Jones Phone: +44 (0)20 7831 3113 mailto:richard.sunderland@fd.com

Branche: Real Estate
ISIN:      JE00B3DCF752
WKN:        
Index:    Standard Market Continuous
Börsen:  Wien / official market



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