For the first six months of 2013, the ratio of credit rating upgrades for senior living provider debt has outpaced downgraded ratings for the strongest ratio since 1997, according to a Z-News report from Ziegler.
Through June 30, 2013, the 10 ratings changes in the senior living sector—as reported by Fitch Ratings, Standard and Poor’s, and Moody’s Investors Service—for unenhanced, fixed-rate debt and borrower underlying credit ratings consisted of seven upgrades and three downgrades for a ratio of 7:3.
While the 7:3 ratio reflects year-to-date ratings through June 2013, Ziegler notes that this pace is the strongest ratio since 1997, when the upgrade-to-downgrade ratio was 6:1 for the year.
Rationale for upgraded ratings were based on “solid and improved liquidity, coupled with good demand and stable occupancy,” according to Ziegler, whereas downgrades were due primarily to “pressure on operating margins from weaker occupancy, as well as higher expenses.”
Written by Jason Oliva