S&P cuts FelCor Lodging ratings

Standard & Poor's said it lowered its ratings on FelCor Lodging Trust Inc., including its corporate credit and senior secured rating to B from B+, its senior unsecured debt to B- from B, and its preferred stock to CCC from CCC+.

The outlook is now stable.

S&P said the rating actions follow the company's weaker-than-expected operating performance in the second half of 2003, which has resulted in credit measures worsening from previous expectations. When factoring in a recovery period of 18 to 24 months, credit measures are not expected to achieve levels consistent with the previous ratings.

The ratings for FelCor reflect the company's high debt leverage and ownership of several under-performing hotels. These factors are offset by its adequate liquidity position, sizable hotel portfolio, and management's ongoing effort to sell non-strategic and/or under-performing hotels.

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