Moody's may downgrade Equinox

Moody's Investors Service said it placed the B3 rating on Equinox Holdings Inc.'s $160 million senior notes on review for possible downgrade in connection with the pending acquisition of the company by The Related Cos. LP.

In connection with the acquisition, Equinox plans to announce a tender offer for the $160 million 9% senior notes due 2009. In reviewing the ratings, Moody's said it will consider the post-acquisition capital structure and the extent of covenant protection and credit support for any of these notes not redeemed in the tender offer.

If the acquisition is consummated and all of the notes are redeemed, Equinox's ratings will be withdrawn, the agency said.

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