By k on June 22, 2009

Approximately JPY 2.2 billion in a mezzanine specified loan and a
specified bond affected

Tokyo, June 22, 2009 -- Moody's Investors Service has placed under review
for possible downgrade the ratings of Restay Hotels Tokutei Mokuteki
Kaisha's Mezzanine Specified Loan and Specified Bond. Final maturity will
take place in May 2014.

Mezzanine Specified Loan, Baa1 placed under review for possible
downgrade; previously, Baa1 assigned on May 18, 2007

Specified Bond, Baa1 placed under review for possible downgrade;
previously, Baa1 assigned on May 18, 2007

This transaction is backed by 19 leisure hotels, which are operated by
Restay Co., Ltd. and are located all over Japan. The deal features a
scheduled amortization and an operator replacement trigger if the
operator's performance declines below a certain level.

The rating action reflects Moody's view regarding the uncertainty of the
leisure hotels' performance, given that the assets have underperformed
our expectation in light of the ratings assigned to the Mezzanine
Specified Loan and Specified Bond.

As consumer spending continues to weaken, leisure hotels are facing
declines in 1) revenue per customer, 2) the length of stay, and 3) the
number of customers, etc. In Moody's view, the performance of the
operator in this transaction is better than the market average, but its
profitability will be negatively affected by the ongoing recession, as
will that of the industry overall.

In its review, Moody's will examine the operator's measures to improve
the profitability of the hotels in light of the difficult business
environment.

The principal methodology used in rating the transaction was "Moody's
Approach to Rating Japanese Whole Business Securitizations" (April 2007),
which can be found at www.moodys.com in the Credit Policy &
Methodologies directory, in the Ratings Methodologies subdirectory.

Other methodologies and factors that may have been considered in the
process of rating this issue can also be found in the Credit Policy &
Methodologies directory.

Moody's Investors Service is a publisher of rating opinions and research.
It is not involved in the offering or sale of any securities, nor is it
acting on behalf of the offering party. This release is not a
solicitation or a recommendation to buy, hold or sell securities.

Related posts:

1. Moody’s places Investec Bank (Australia) on Review for Possible Downgrade Sydney, May 27, 2009 -- Moody's Investors Service has...
2. Moody’s assigns ratings to Polaris Securities CBO SPT 2006-2 Taipei, June 17, 2009 -- Moody's Investors Service has...
3. moody’s assigns Aaa to Japan Finance Organization for Municipalities’ bond oody's assigns Aaa to Japan Finance Organization for Municipalities'...
4. Moody’s downgrades Aaa rating of one class and affirms all other ratings Tokyo, July 29, 2009 -- Moody's Investors Service announced today...
5. Moody’s reviews BBI Finance’s B1/B2 ratings with direction uncertain Sydney, October 02, 2009 -- Moody's Investors Service has today...

Related posts brought to you by Yet Another Related Posts Plugin.

Readers Comments