Moody's rates Host Marriott

Moody's Investors Service said it has assigned its B3 rating to the proposed $75 million offering of class E cumulative preferred stock of Host Marriott Corp. Concurrently, Moody's has affirmed Host Marriott's Ba3 senior unsecured debt ratings.

Host Marriott plans to use the proceeds from this offering to redeem higher coupon class A preferred stock. This transaction will be accretive to the REIT's earnings (on a pro forma basis), and will result in an improved fixed-charge coverage.

According to Moody's, Host Marriott's B3 preferred stock rating reflects the potential that the REIT could be constrained in its ability to make preferred stock dividends and other distributions to equity owners under the restricted payment covenant in its bond indenture.

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