EANS-News: Atrium European Real Estate Limited / Credit Rating Upgrade

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Ratings

St Helier Jersey / Channel Islands (euro adhoc) - Credit Rating
Upgrade

Jersey, 29 October 2010. 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, is pleased
to announce that Fitch Ratings has today upgraded the Company's
senior unsecured rating and Long-term Issuer Default Rating ("IDR")
by two levels to 'BB+' from 'BB-', with a 'Stable' outlook. Atrium's
Short-term IDR was affirmed as 'B'.

The press release issued by Fitch is included below.

FITCH UPGRADES ATRIUM TO 'BB+'; OUTLOOK STABLE

Fitch Ratings-London-29 October 2010: Fitch Ratings has today
upgraded Atrium European Real Estate Ltd's (Atrium) senior unsecured
rating and Long-term Issuer Default Rating (IDR) to 'BB+' from 'BB-'.
The agency has simultaneously affirmed Atrium's Short-term IDR at
'B'. The Outlook on the Long-term IDR is Stable.

"The upgrade reflects the stabilisation of rental income, reduced
property costs and lower interest payments resulting from high-coupon
bond buy-backs of EUR232m in H110," says Jean-Pierre Husband,
Director in Fitch's European Corporate Finance Department. "With
development expenditure now complete and the financial structure
re-profiled, Atrium's business model is now similar to its Western
European peers."

With tenant defaults lower than expected in FY09, Fitch believes
Atrium's EBIT Net Interest Cover (NIC) should stabilise between 3.0x
and 4.5x between FY10 and FY13. Net leverage should also stay low in
the next three years (loan to value (LTV) of between 5% and 25% to
FY13), although Fitch believes that leverage will increase closer to
industry average levels (LTV around 40%) over the medium term. This
should allow Atrium some financial flexibility and acquisitions of
existing rental-generating shopping centres may be possible.

While the CEE region has been one of the most exposed to the global
economic downturn, it is beginning to show some signs of recovery
(see Fitch Emerging Markets Ratings Newsletter -July 2010) with
companies reporting improved cash flows and dividends. Fitch is
expecting the Russian economy for example to grow 4.3% in 2010, and
4% in 2011 and 2012.

The ratings are, however, constrained by the outstanding litigation
in respect of the share buy-backs in 2007, and Fitch has little
visibility over its timetable or outcome. Although Fitch believes
that the ultimate liability to the owners and management may be
limited, there is some uncertainty and Atrium's ability to issue new
bonds may be constrained. Fitch also expects Atrium to maintain an
EBIT NIC of above 2.0x for an investment grade rating.

Atrium has drastically cut back on its committed development
programme, with only one retail project currently under construction
in Poland - with a committed spend of EUR8m. This has assisted the
company's liquidity profile. At 30 June 2010 Atrium had EUR386m of
cash deposits available, sufficient to pay the development costs
outstanding (EUR8m) and total debt maturities of EUR58m in FY10 and
FY11. With only EUR35m of development spend in 2011, Atrium's
liquidity position is now strong (with a liquidity score of around 4x
at end-June 2010).

Although gross rental income stagnated in H110 (EUR74.4m vs EUR74.6m
in H109) due to temporary discounts on rents (not more than three
months) in Russia and Latvia, the increase in net service charge
income (due to re-negotiated utility costs and other efficiency
improvements) and reduced property expenses has resulted in net
rental income increasing 11%. This positive trend is also underlined
by the increased occupancy across the group's CEE shopping centre
portfolio now at 94.6% (94% at end-December 2009), close to the
optimum for a retail landlord.

Fitch's 12 March 2010 special report, entitled "Rating EMEA REITs and
Property Investment Companies", explains the credit factors the
agency uses to analyse the European Real Estate Investment (REIT) and
Property Investment Company (PIC) corporate sub-sectors. The report
follows the earlier publication of another background report on 10
February 2010, entitled "Interpreting the New Sector Credit Factor
Reports for Corporates". Both reports are available at
{www.fitchratings.com}[HYPERLINK: http://www.fitchratings.com].

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
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ots Originaltext: Atrium European Real Estate Limited
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Financial Dynamics, London

Richard Sunderland / Laurence Jones / Will Henderson

Phone: +44 (0)20 7831 3113

mailto:richard.sunderland@fd.com

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