Moody's Lowers Chateau's Ratings

The ratings of Chateau Communities Inc., Greenwood Village, Colo., and its affiliate CP LP have been lowered by Moody's Investors Service.CP's senior unsecured notes were downgraded from Baa3 to Ba1, and Chateau's preferred stock shelf was downgraded from (P) Ba1 to (P)Ba2, the rating agency said. The rating outlook is uncertain. Moody's said the downgrades reflect the weak operating performance of the real estate investment trust, strained fundamentals in the manufactured housing industry, and uncertainty in addressing Chateau's debt maturities in 2004 and 2005. Moody's said Chateau's operating performance has been weak for several quarters, reflecting "a difficult tenant collection environment and market for financing manufactured housing units." In addition, its financing strategy for the acquisition of CWS Communities in late 2001 (a company also involved in MH communities) was not executed according to plan, thereby "crimping financial flexibility," Moody's said. Moody's can be found online at http://www.moodys.com.