The senior unsecured debt of Prudential Property Investment Separate Account, rated Aa3, has been placed on review for possible downgrade by Moody's Investors Service.The action reflects "a steady increase" in effective leverage (including joint venture debt) from 20.1% of total assets at year-end 2002 to 24.5% as of June 30, 2005, and in secured debt from 18.7% at year-end 2002 to 25.9% as of June 30, the rating agency said. It also reflects "moderate" property investment performance, given the firm's high rating. "A mitigating factor is PRISA's fixed charge coverage of 6.3x as of June 30, 2005, which is much higher than most coverage ratios for commercial real estate firms, though it has declined from 8.4x for 2002," Moody's said. "In addition, PRISA maintains ample liquidity, with strong equity investor interest." PRISA is managed by Prudential Real Estate Investors, a full-service real estate adviser that is part of Prudential Insurance. Moody's can be found online at http://www.moodys.com.

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