Credit ratings can be useful for senior living providers—even the smaller companies—for improving access to capital, gaining economic value through demonstrating financial health, and benchmarking performance against other similar organizations, said a group of panelists during an online senior living conference held in March, reports Healthcare Finance.
“At its core, credit ratings provide transparency and third party verification for investors in this space, which helps to provide greater access to capital to the extent that financings are being undertaken and also provides a more economical or lower cost of that capital, i.e., lower interest rates, better terms and those types of things,” said Nick Gesue, moderator of the online conference, “Make or Break: The True Value of Credit Ratings,” sponsored by publisher Irving Levin Associates. Gesue is chief credit officer at Lancaster Pollard, a firm providing capital to the senior living, healthcare and affordable housing industries.
“Looking at accessing capital,” Gesue continued, “nonrated organizations have much more limited access to capital, and when and if they do access capital as a nonrated organization their cost of that capital can be quite significant.”
Beyond capital, two other senior living executives talked about deriving economic value from credit ratings in both direct and indirect ways, and using ratings to compare company performance to both competitors and the industry as a whole. Additionally, the director of Fitch Ratings’ public finance healthcare group said a relationship with a ratings agency can help companies with their strategic planning by gaining a rating agency perspective.
Read more at Healthcare Finance.
Written by Alyssa Gerace