Moody's Downgrades Simon

The senior unsecured debt and the preferred stock of Simon Property Group LP, a real estate investment trust, have been downgraded by Moody's Investors Service.The debt rating was lowered from Baa1 to Baa2, and the preferred stock rating was lowered from Baa2 to Baa3. The actions followed the REIT's announcement that it had made an unsolicited offer to acquire Taubman Centers for $1.5 billion in cash and to assume approximately $2.4 billion in Taubman's share of secured debt. Simon's offer was rejected by the Taubman board. Moody's noted that Simon's bid for Taubman's "highly levered and entirely encumbered portfolio" came on the heels of its participation in the $5.3 billion acquisition of the Rodamco regional mall portfolio with a group of REIT partners. "Although Moody's recognizes that Simon may ultimately not be successful in taking control of the Taubman portfolio, Moody's expects Simon to continue to be an active participant in transactions for regional malls in order to maintain its leadership position, even if doing so results in coverage levels and secured debt levels that are inconsistent with its Baa1 rating," the rating agency said. Moody's can be found on the Web at http://www.moodys.com.