Moody's drops General Growth

Moody's Investors Service said it has downgraded the ratings on General Growth Properties, Inc., certain of its subsidiaries and the Rouse Co. LP (to Ca from Caa2 senior secured bank debt; to Ca from Caa2 senior unsecured debt).

The ratings remain on review for possible downgrade.

The agency said that the rating action reflects a heightened likelihood of default and the potential for above average loss severity in the event of default for debt holders of General Growth and for Rouse bondholders.

According to Moody's, the REIT's failure to repay $900 million in mortgages on Dec. 12 will most likely lead to an imminent acceleration of debt on the Rouse bonds.

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