FelCor Ratings Downgraded By Moody's Analysts

NEW YORK (AP) — Moody's Investors Services assigned a B2 non-investment grade rating to new senior secured notes issued by Felcor Lodging Trust Inc. and downgraded other ratings.

Moody's analysts lowered the real estate investment trust's corporate family rating to B3 from B2. They also downgraded the ratings of FelCor's outstanding senior unsecured notes to B3 from B2, as well as the ratings of its preferred stock to Caa3 from Caa2. The rating outlook remains negative.

All the ratings are non-investment grade, or "junk."

FelCor said Thursday that a subsidiary plans to raise $530 million in new debt and proceeds will be used to pay off debt due in 2011. The funds, after expenses, will be used to pay off $215 million in senior secured notes carrying a floating rate and $300 million in senior secured notes with an interest rate of 8.5 percent. Both come due in 2011.

Shares fell 19 cents, or 4 percent, to close at $4.51.