Moody's Reviewing Glenborough Ratings

The ratings of Glenborough Realty Trust Inc., a real estate investment trust based in San Mateo, Calif., have been placed on review for possible downgrade by Moody's Investors Service following the office REIT's announcement that it has agreed to be acquired by Morgan Stanley Real Estate for $1.9 billion.Affected are the ratings of Glenborough's preferred stock, at Ba3, and its preferred stock shelf, at (P)Ba3, as well as the ratings of Glenborough Properties LP's unsecured debt shelf, at (P)Ba1, and its subordinate debt shelf, at (P)Ba2. The purchase price of the acquisition includes repayment or assumption of Glenborough's existing debt and redemption of its series A convertible preferred stock. "If the preferred stock is entirely redeemed at closing as planned, Moody's would anticipate confirming and withdrawing the ratings," the rating agency said. "Should the transaction not proceed as expected, Moody's would evaluate any subsequent strategic actions by Glenborough Realty to realize value from its office property portfolio, such as asset sales or changes in capital structure, before finalizing the review." Moody's can be found online at http://www.moodys.com.