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Atrium European Real Estate Limited

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

St Helier Jersey / Channel Islands (euro adhoc) -

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
Company Information
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
end of announcement                               euro adhoc

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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