Summit's Debt Downgraded

The senior unsecured debt rating on Summit Properties Partnership LP has been lowered from Baa3 to Ba1 by Moody's Investors Service, and its rating outlook has been revised from negative to stable.In addition, the preferred stock shelf rating on Summit Properties Inc., Charlotte, N.C., was lowered from (P)Ba1 to (P)Ba2. Moody's attributed the downgrades to the company's replacement of its unsecured line of credit with a secured credit facility. The rating agency said the secured credit line should result in savings on fees and interest, but that using such a facility as the main working capital line is "inconsistent with an investment-grade rating, as it materially weakens protection for unsecured bondholders." Moreover, the secured facility "will significantly increase secured debt levels, which were on the high side: secured debt was 23% of gross assets June 30, 2003," Moody's said. Summit is a real estate investment trust that specializes in luxury apartment communities. Its debt ratings were also recently lowered by Standard & Poor's Ratings Services. Moody's can be found online at http://www.moodys.com.