Moody's may drop Macquarie MEAG

Moody's Investors Service said it placed the Baa1 corporate family and Baa2 senior unsecured debt ratings for Macquarie MEAG Prime REIT under review for possible downgrade.

"The rating action is prompted by Macquarie MEAG's announcement on Feb. 19 to undertake a comprehensive strategic review to address the trust's underperforming unit price against underlying value of the trust's assets given Macquarie Bank's intentions to dispose off its entire 26% stake," said Kathleen Lee, a Moody's vice president.

"The strategic review raises considerable uncertainty around the asset profile and ownership structure of the REIT and has jeopardized Macquarie MEAG's progress to raise medium-term financing to take out short term loans totaling S$235 million that fall due over the next 7 months, of which nearly 80% matures in May 2008."

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