Moody's rates Associated Estates notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to Associated Estates Realty Corp.'s $100 million senior unsecured notes issued recently via a private placement.

In addition, Moody's affirmed the multifamily REIT's existing senior unsecured debt shelf rating at provisional Baa3. The preferred stock shelf rating was upgraded to provisional Ba1 in order to be consistent with our standard notching practices for REITs rated Ba2 or higher (senior unsecured) with strong bond covenants outstanding.

The outlook remains stable.

Moody's said the ratings consider the REIT's recently announced plans to acquire a portfolio of seven newer class A assets for $324 million. This acquisition is consistent with the ongoing efforts to diversify and reposition its portfolio towards newer assets located in sub-markets with better long-term growth characteristics.

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