Kilroy Realty Corp.

The stable outlook reflects S&P Global Ratings' view that the COVID-19 pandemic will modestly disrupt KRC's operating performance in the short term and that the company will be able to withstand a challenging operating environment, given the cushion it has built. We believe the company's operating performance can be temporarily hurt, but we expect its focused strategy and cautious measures to enhance liquidity will ultimately result in stable credit metrics with debt to EBITDA around 6x and fixed-charge coverage (FCC) above 2.5x over the next couple of years. We could lower the ratings if KRC's EBITDA declines materially and drives debt to EBITDA above 7.5x on a sustained basis perhaps because of its inability to re-lease space or if the

...Kilroy Realty Corp. (KRC) has a strong tenant roster with a focus on tech and life science. KRC's tenant mix comprises well-capitalized technology companies and has shown an increased focus on life science tenants as well. S&P Global Ratings believes these two sectors will be more resilient through the COVID-19 pandemic and the resulting economic recession, given their underlying relevance. We think that outpaced growth of tech companies, following a national economic shutdown, and the critical nature of life science companies in overcoming the pandemic, will remain positive tailwinds for KRC over the next several years. KRC has strong operating performance and holds a leading position in outperforming West Coast markets. KRC owns high-quality properties in the San Francisco Bay Area, Los Angeles, San Diego, and other key submarkets. We believe KRC's competitive position along with strong market fundamentals across the West Coast will allow the company to maintain a well-leased portfolio...

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