S&P lowers Ginn-LA

Standard & Poor's said it lowered its corporate credit ratings on Ginn-LA CS Borrower LLC and Ginn-LA Conduit Lender Inc. to CCC+ from B-. The agency lowered Ginn-LA's first-lien bank loan to CCC+ from B- and its second-lien bank loan to CCC- from CCC.

The ratings were removed from CreditWatch, where they were placed with negative implications on March 27, 2007, and the outlook is negative.

The agency said the downgrade acknowledges the extended duration and severity of the national housing recession and reflects S&P's expectation for lower-than-budgeted cash flow as land prices soften and absorption slows within Ginn-LA's luxury resort and second-home communities.

S&P noted, however, that Ginn-LA's land sales in the third quarter exceeded revised budget levels because of several bulk land sales to affiliates of one of the borrowers' sponsors that were agreed to as part of a restructuring that occurred in July 2007. The restructuring alleviated a potential liquidity event, which was one of the concerns prompting the former CreditWatch listing.

The negative outlook reflects longer-term uncertainty regarding the timing of a recovery in the discretionary luxury resort and second-home housing niche, particularly in oversupplied Florida housing markets, the agency said.

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