Moody's ups Equity Inns preferreds to B2

Moody's Investors Service said it upgraded its ratings of the preferred stock of Equity Inns, Inc. to B2 from B3 and assigned a first time issuer rating of Ba3 to Equity Inns Partnership, LP, the 97%-owned operating partnership through which the REIT conducts substantially all of its business and holds all of its hotel assets. The outlook is stable.

According to Moody's, the upgrade reflects Equity Inns' increasingly sound position in the less volatile limited service hotel sector, its steady growth in size and diversity and its ability to weather the recent downturn in the lodging sector without substantial distress.

Moody's said further upgrades for Equity Inns would require a reduction in secured debt closer to 38% of gross assets and growing the unencumbered asset pool closer to 25%.

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