Moody's Downgrades Gables

The ratings of Gables Residential Trust, a multifamily real estate investment trust based in Boca Raton, Fla., have been downgraded by Moody's Investors Service and placed under review for possible further downgrade.The downgrades were as follows: Gables Realty LP, senior unsecured debt, from Baa3 to Ba1; Gables Residential Trust, series C-1 and D preferred stock, from Ba1 to Ba2, and preferred stock shelf, from (P)Ba1 to (P)Ba2. Moody's said the actions were prompted by Gables' announcement of an agreement to be acquired by a partnership managed by ING Clarion Partners. Under the pact, the ING Clarion partnership will acquire all of Gables' common stock for $43.50 per share in cash. The total consideration of approximately $2.8 billion includes the assumption and refinancing of approximately $1.2 billion of Gables' outstanding debt and preferred shares. Moody's said that "although the precise capital structure of Gables subsequent to this transaction is not yet clear, it is likely that leverage, particularly secured leverage, will increase materially, while fixed charge coverage will decrease." The rating agency said Gables will likely operate with "a more aggressive risk profile" because it is expected to increase development activities under its new ownership. Moody's can be found online at http://www.moodys.com.