Moody's Downgrades iStar

Moody's Investors Service has downgraded the ratings of iStar Financial, a New York-based real estate investment trust, from Baa2 to Baa3 in the wake of an announcement that the commercial REIT expects to take increased loan provisions of $275 million for the second quarter. The outlook remains negative. Moody's said it expects iStar's nonperforming assets and core earnings to continue to be pressured in the near term "given the persistent instability of the credit markets." The negative outlook reflects this instability and the weakening economic environment, the rating agency said. The downgrade also reflects the higher leverage that resulted from the Fremont transaction in mid-2007, Moody's said. The rating agency can be found online at http://www.moodys.com.