Kilroy Realty Corp.'s portfolio continues to face secular office headwinds, and we expect weaker West Coast fundamentals will pressure operating performance and leverage metrics over the next two years. Therefore, we lowered our issuer credit rating on Kilroy to 'BBB-' from 'BBB'. At the same time, we lowered our issue-level rating on the company's unsecured debt to 'BBB-' from 'BBB'. The stable outlook reflects our expectation that, despite some additional projected deterioration in credit metrics over the next two years, Kilroy will manage a relatively conservative balance sheet amid secular headwinds. We project S&P Global Ratings-adjusted debt to EBITDA will likely rise to the high-6x area, with fixed-charge coverage (FCC) remaining around 3x, over the next two years. As of
