New York, November 20, 2012 -- Moody's Investors Service upgraded the senior unsecured debenture ratings of First Capital Realty Inc. to Baa2 and revised the rating outlook to stable, from positive. The upgrade reflects First Capital's steady growth in its shopping center franchise throughout Canada's major markets while improving its financial profile with key metrics such as secured debt, unencumbered assets and fixed charge coverage moving solidly into the mid-Baa range. Since first being rated in 2006, First Capital has made significant progress in reducing secured debt and unencumbering assets through the issuance of unsecured debt rather than mortgaging properties. The stable outlook reflects Moody's expectation that First Capital will steadily grow its shopping center franchise throughout Canada's major markets while continuing to improve its financial profile with key metrics such as secured debt, unencumbered assets and fixed charge coverage to at least 2x.

The following ratings were upgraded with a stable outlook:

First Capital Realty Inc. -- Senior unsecured debentures at Baa2; unsecured debt shelf at (P)Baa2.

RATINGS RATIONALE

The rating action also reflects First Capital's liquidity coverage and funding profile, which have shown consistent improvement. At September 30, 2012, the company had a $500 million unsecured revolving line of credit maturing in June 2014 with a one-year extension option and 91.2% availability, and a $50 million secured facility with 100% availability maturing in December 2012. The $50 million facility is under negotiation and is expected to be renewed prior to December 31, 2012. Debt maturities are staggered. Other sources of capital year-to-date include equity issuances, conversions of convertible debentures into common shares, secured and unsecured debt financings, asset sales, as well as internally generated cash flow. First Capital's dividend payout is conservative and it has the added flexibility of retaining cash since it is a C-corp rather than a REIT. Unencumbered assets/gross assets are low for an investment-grade rated real estate company, but has improved to 45.7% at 3Q12 from 21.9% in 2006 when FCR was first rated, and the company has made strides in removing encumbrances on many properties over the past six years. Overall leverage has declined to 46.7% at 3Q12 from its peak of 63% in 2007 and secured debt/gross assets declined to 23% at 3Q12 from 43% in 2006. First Capital's assets reflect market value since its mandatory adoption of IFRS, effective January 1, 2011.

First Capital's Baa2 rating continues to reflect its strong franchise in the major Canadian retail property markets mirroring the population dispersion in Canada and a proven development and re-development capability. With a current occupancy of 95.6% including vacant space held for redevelopment, First Capital maintains a well-leased portfolio with laddered lease maturities of primarily infill shopping centers in major population centers throughout Canada. As of 3Q12, First Capital's portfolio was comprised of 24.2 million square feet, and was diversified across the Greater Toronto Area (GTA) (31% of annual minimum rent), Calgary/Edmonton/Red Deer (22%), Greater Montreal (16%), and Greater Vancouver (11%). Moody's notes that First Capital's market leadership in the largest Canadian markets and strong relationships with the major tenants in key retail categories (grocery, drugstore, national banks, general merchandise, liquor stores, fast food and medical) is important. For many of these tenants, First Capital is one of their largest landlords -- a plus. Almost half of the company's tenants have investment grade ratings.

Moody's stated that a rating upgrade would be unlikely in the near term, but eventually would reflect a reduction in secured debt to the low-teens range; fixed charge coverage consistently in the mid-2x range; and a decline in overall leverage closer to 40%. Downward rating pressure would result from an increase in secured debt above its current 23%; maintenance of fixed charge coverage consistently below 2x; an increase in effective leverage above the mid-50% range; or a shift from its unsecured debt strategy.

The last rating action with respect to First Capital was on December 8, 2011 when Moody's affirmed First Capital's Baa3 senior unsecured debenture rating with a positive outlook.

The principal methodology used in this rating was Global Rating Methodology for REITs and Other Commercial Property Firms published in July 2010. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

First Capital Realty, Inc. [TSX: FCR.TO], headquartered in Toronto, Ontario, Canada, is an owner, developer and operator of supermarket and drugstore anchored neighborhood and community shopping centers, located predominantly in metropolitan areas. At September 30, 2012, First Capital owned interests in 172 properties, including six ground up developments, totaling approximately 24.2 million square feet of gross leasable area. It had total assets of CAD$7.2 billion and total equity of CAD$3.1 billion.

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Merrie S. Frankel VP - Senior Credit Officer Commercial Real Estate Finance Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Nick Levidy MD - Structured Finance Commercial Real Estate Finance JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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