Moody's puts American Campus on review for downgrade

Moody's Investors Service said it placed on review for downgrade the ratings of American Campus Communities, Inc., including the Baa2 senior unsecured rating of its main operating subsidiary, American Campus Communities OP PRS LP, following the announcement on April 19 of the REIT entering into a definitive agreement of a merger transaction with Blackstone Real Estate Income Trust, Inc. and Blackstone Property Partners, LP.

The review for downgrade is due to the high likelihood of a deterioration in the REIT's leverage profile, coupled with a potentially more aggressive growth strategy, Moody’s said.

As a result, Moody’s said there is the possibility of a multi-notch downgrade.

“The review will focus on the firm's post-transaction capital structure and portfolio strategy, including the likely trajectory of the operating metrics, leverage ratios and growth plans,” Moody’s said in a news release.

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