Fitch Affirms & Removes iStar from Rating Watch Negative

NEW YORK--(Business Wire)--
Fitch Ratings has affirmed and removed from Rating Watch Negative the Issuer
Default Rating (IDR) and outstanding debt ratings of iStar Financial Inc.
(iStar) as follows:

--IDR at 'B-';

--Unsecured revolving credit facilities at 'B-/RR4';

--Senior unsecured notes at 'B-/RR4';

--Convertible senior floating-rate notes at 'B-/RR4';

--Preferred stock at 'CC/RR6'.

The Rating Outlook is Negative. The rating action affects approximately $8.3
billion of obligations.

The removal of iStar's ratings from Rating Watch Negative is based on iStar's
entry on March 16, 2009 into a $1 billion delayed draw secured credit agreement
with participating members of its existing bank lending group. This new
financing provides iStar with additional capital to improve the company's
liquidity in addressing near-term debt maturities and funding obligations to
iStar's existing borrowers, which Fitch noted as concerns in placing iStar's
ratings on Rating Watch Negative on March 3, 2009. Offsetting the liquidity
improvement is the subordination to which iStar's unsecured creditors are now
subject. In addition to the company entering into the $1 billion delayed draw
secured credit agreement, iStar entered into secured debt agreements with its
existing lenders totaling $2.65 billion, which, taken together, encumber
approximately $4.4 billion of iStar's assets. These new secured financings
result in a smaller and lower-quality unencumbered asset pool supporting
unsecured creditors.

The assignment of a Negative Outlook reflects Fitch's concern that challenging
conditions in the commercial real estate debt capital markets will continue to
make it difficult for iStar's borrowers to repay their loans on a timely basis,
thus weakening iStar's liquidity position. While iStar's entry into the new $1
billion secured credit agreement will provide the company with capital to
address a portion of capital uses during 2009, iStar may need to rely on the
resolution of non-performing loans and asset sales to address 2009 debt
maturities and funding obligations.

A revision of the Negative Outlook to Stable would be driven by:

--The reduction in the level of non-accrual and watch list loans to less than
25% of the gross loan portfolio (currently 37%);

--iStar meeting future funding obligations and 2009-2010 unsecured debt
maturities via borrower loan repayments, resolution of non-performing loans and
asset sales, as opposed to incurring additional debt.

Headquartered in New York City, iStar provides structured financing and
corporate leasing of commercial real estate nationwide. iStar leverages its
expertise in real estate, capital markets, and corporate finance to serve real
estate investors and corporations with sophisticated financing requirements. As
of Dec. 31, 2008, iStar had $15.8 billion of undepreciated assets and $2.9
billion of undepreciated book equity.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Steven Marks, 212-908-9161
Christopher Wolfe, 212-908-0771
or
Media Relations:
Sandro Scenga, 212-908-0278
Email: sandro.scenga@fitchratings.com

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