Moody's may downgrade Winston Hotels

Moody's Investors Service said it placed the B2 preferred stock rating of Winston Hotels, Inc. on review for downgrade after it was announced that 100% of Winston's common stock shares would be purchased by Wilbur Acquisition Holding Co., LLC, which is held by affiliates of Och-Ziff Real Estate and Norge Churchill, Inc. Wilbur plans to leave the series B preferred stock outstanding as shares of the surviving entity.

The agency said the possible downgrade takes into consideration the potential for additional leverage and portfolio sales that may occur when Winston becomes a private company. During its review, Moody's will focus on Winston's pro forma capital structure - specifically, the overall leverage and the use of secured debt - its strategic profile and its management structure.

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