Fitch Rates $42MM Masonic Home of Kentucky 2008 Revs ‘BBB’; Outlook Stable

Fitch Ratings has assigned a ‘BBB’ rating to the expected issuance of $42.2 million Kentucky Economic Development Finance Authority healthcare facilities revenue bonds series 2008 A&B (Masonic Homes of Kentucky, Inc. [MHKY]). Rating Outlook is Stable.  MHKY was established by the Grand Lodge of Kentucky Free and Accepted Masons in 1867 to provide a home for widows and orphans of Masons who lost their lives in the Civil War. The Grand Lodge is located on the MHKY campus and has historically provided direct financial support as well as assisting in generating philanthropical support among its membership for MHKY.

Fitch’s primary credit concern is successful completion of the long term care center and expansion into new service offerings. The new facility is expected to be completed and available for occupancy in fiscal 2010. Besides the risk of construction delay, management’s projections incorporate successful integration of palliative care, advanced dementia care, short term rehab and dialysis services which are not currently offered by MHKY.  Fitch believes that construction risks associated with the project are minimized through execution of a guaranteed maximum price contract which includes provision for liquidated damages. Moreover, the current management team is experienced in long term care operations and has executed a similar development of MHKY’s the new service lines in the for-profit setting.

Located in Louisville, Kentucky, Masonic Homes of Kentucky, Inc. is long term care provider with over 600 units of independent, assisted and nursing care. The obligated group consists of 260 skilled nursing beds, 132 personal care beds and 21 assisted living apartments at the Louisville and Shelbyville campuses. MHKY expects to provide annual and quarterly financial and utilizations data to the NIRMSIRs and direct to any requesting bondholder.



Fitch Ratings
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