Bangkok--15 Jun--Standard & Poor's
Standard & Poor's Ratings Services lowered its long-term and underlying ratings (SPUR) on Medford Hospital Facilities Authority, Ore.'s 2002 revenue bonds, issued for Rogue Valley Manor (RVM), to 'BBB+' from 'A-'. At the same time, Standard & Poor's revised its outlook on the same series to stable from CreditWatch with negative implications. The CreditWatch placement was based on the expiration of RVM's letter of credit (LOC) associated with its 2002 debt, and RVM's uncertain debt restructuring plans.
The lowered rating reflects our concern regarding RVM's concentrated debt profile, with 100% variable-rate debt outstanding, coupled with historically limited and further declining debt liquidity. While RVM has historically had limited liquidity (relative to debt), the risk for non-renewal on the existing LOCs creates greater risk in the current challenging credit environment.
"The stable outlook reflects RVM's excellent demand characteristics and ongoing stable financial performance," said Standard & Poor's credit analyst Geraldine Poon. "Although liquidity, as measured by operating expenses, provides a cushion, we continue to have concerns regarding low cash-to-debt, very high debt burden, and weak coverage."
RVM is a nonprofit continuing-care retirement community located in Medford, Ore. Originally constructed in 1961, RVM has developed the campus by adding 296 cottages; a 75-unit, high-rise building (Skyline Plaza, financed with the series 1997 bonds); and a health services center, for a total of 582 independent-living, 45 assisted-living, 21 special care, and 72 skilled-nursing units.
RELATED RESEARCH
USPF Criteria: "Senior Living," June 18, 2007
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Geraldine Poon, San Francisco (1) 415-371-5078
Stephen Infranco, New York (1) 212-438-2025
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]