REAL ESTATE : Irvine Co. May Be Weighing Unsecured, Junk Bond Issue

Rating officials from Standard & Poor’s Corp. were in town last week to chat with Irvine Co. Chairman Donald Bren. The subject: Ratings for a possible bond issue, probably a privately placed, unsecured, junk bond issue from Orange County’s largest landowner, according to sources at the New York-based rating agency.

The Irvine Co., which sold a 39% minority stake in its apartment properties to the public in a successful $187-million real estate investment trust last year, is looking at ways to raise additional capital, Bren, 62, has said recently.

Those possibilities include a Real Estate Investment Trust composed of industrial and/or retail properties--such as its 1.3 million-square-foot Fashion Island shopping center and the 3,600-acre Irvine Spectrum industrial and office park--by the end of this year, or a type of bond issue. The company may be eyeing an unsecured bond issue because a bond issue secured by properties would tie up those properties and not allow them to later serve as security for a REIT. The privately held company could eventually become a holding company with several publicly owned companies, Bren has said.

“It was a brief meeting, but thorough,” said Jean Callanan, a real estate analyst with Standard & Poor’s in New York, who said she could not comment further on the bond issue.