Moody's placed ParkwayProperties Inc.'s Baa3 issuer rating on review for downgrade,warning that a downgrade could be more than one notch.

The global rating agency noted that the rating action followsthe company's recently announced deal to merge with in an all-stocktransaction.

"Although Parkway will be part of a larger, morediversified office REIT focused on high-growth Sunbelt markets, we expectsecured leverage will increase significantly as Cousins relies on a securedfunding model," Moody's said in a statement.

Moody's said that Parkway's current Baa3 rating reflects itsexpectation that the company would cut secured debt and boost the size andquality of its unencumbered asset pool.

The rating agency added that in its review, it will focus onParkway's pro forma capital structure, specifically overall leverage and theuse of secured debt and its strategic profile.