Moody's Eyes Archstone Debt Ratings

The Baa1 senior unsecured debt ratings of Archstone-Smith Trust have been placed under review for possible downgrade by Moody's Investors Service.Moody's noted that the move comes on the heels of an announcement that Archstone-Smith is being acquired by a partnership sponsored by Tishman Speyer and Lehman Brothers in a transaction valued at approximately $22.2 billion. "Although it is assumed that the unsecured notes will be taken out at closing and the preferred shares will either be redeemed or converted into preferred shares of the surviving entity at the election of the partnership, the precise capital structure subsequent to this transaction is not yet clear," the rating agency said. "Moody's considers it likely that leverage, particularly secured leverage, will increase materially, while other credit metrics are likely to deteriorate." The rating agency can be found on the Web at http://www.moodys.com.