Moody's Downgrades Lend Lease Debt

NEW YORK CITY-The senior unsecured debt of Lend Lease Corp. has been downgraded to Baa2 from A3 by Moody’s Investors Service, headquartered here. The change was based, in part, on the firm’s belief that the firm would face higher risk and cyclical property operations following the sale of its large life insurance business.

The new rating also reflects Moody’s opinion that the firm’s effort to expand its position as a global real estate provider, which a portion of the sale proceeds will help finance, may not add to its bottom line for some time because of the difficulties in integrating disparate and geographically diverse businesses. Also, it is unclear how the balance of the proceeds will be used, whether for stock buyback, acquisitions or otherwise. Moody’s also states that a substantial portion of the firm’s revenues are performance and transaction based and exposed to the volatility of the property cycle.