Summary: London Merchant Securities PLC Oct 06

Standard & Poors, October 2006

Abstract
The ratings on U.K.-based property investment company London Merchant Securities PLC (LMS) reflect the cash flow stability provided by its strategically located property portfolio, let under long leases, with strong tenants and upward-only rent reviews. The ratings are constrained by LMS' weak cash flow-based credit measures, increasing development activity, and its relatively small size. LMS' venture capital business was demerged during the summer, and trades as a separate company (Leo Capital). At March 31, 2006, LMS had adjusted debt of -416 million (property debt only). At March 31, 2006, the LMS property portfolio consisted of -1.11 billion of office (60%) and retail and leisure (35%) properties split geographically between London (71%) and the rest of the U.K. (29%). Great Portland...

Companies mentioned in this report are: Derwent London PLC
Action: Review

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

This product consists of a Summary Analysis: Bi-annual (at least). An abbreviated analysis containing Standard & Poor's issuer credit ratings as of the time the article was published. The analysis includes a rating rationale - the basis on which the rating was assigned - and an outlook section if the issuer is not on CreditWatch. Financial statistics are not included.

Derwent London PLC

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