Moody's: Katrina-Linked Losses 'Manageable'

Hurricane-related losses for mortgage banks and the housing government-sponsored enterprises are likely to be manageable and unlikely to result in any rating changes, according to Moody's Investors Service.In addition, the rating agency said losses for rated real estate investment trusts will probably be minor. In a report on Hurricane Katrina's probable rating impact on firms in the real estate sector, Moody's said losses for the Federal Home Loan Banks and the Farm Credit Banks are likely to be "modest." Losses for Fannie Mae and Freddie Mac are likely to be higher "but not severe," and spread out over several reporting periods. "The two firms' earnings and capital bases should be more than adequate to absorb likely losses," the rating agency said. Regarding rated REITs, Moody's said none have material exposure, if any, to southern Louisiana, Mississippi, or Alabama. Few REITs own "more than a handful" of properties in these states, it said. Moody's can be found online at http://www.moodys.com.