Fitch Affirms 'BBB-' IDR for Nationwide Health Properties.

NEW YORK -- Fitch Ratings has affirmed the existing ratings for Nationwide Health Properties (Ticker:NHP) as follows:

--Issuer Default Rating (IDR) 'BBB-';

--Unsecured bank credit facility 'BBB-';

--Senior unsecured notes 'BBB-';

--Preferred stock 'BB+'.

The Rating Outlook is Stable.

The ratings are supported by the company's large and fairly well-diversified portfolio, solid debt service coverage ratios, reasonable leverage, a sizable pool of unencumbered assets, limited debt maturities over the next several years, and modest investment expiration schedule. A high percentage of the company's properties are subject to master leases. Primary credit concerns include meaningful tenant concentration and some exposure to government reimbursement risk.

NHP has continued to increase the size of its portfolio of geographically diverse investments in several sectors of the health care industry, including assisted living and independent living facilities (60% of total revenue), skilled nursing facilities (28% of total revenue), continuing care retirement communities (6% of total revenue), medical office buildings (4% of total revenue), and specialty hospitals (2% of total revenue).

As of June 31, 2007, 84% of the company's investments were subject to master leases. Additionally, the majority of NHP's leases contain cross-collateralization and cross-default provisions. This minimizes adverse selection risk on weaker facilities in the portfolio. A small portion of the company's leases expire each year.

The bulk of NHP's investments contain triple net lease provisions, providing fairly stable cash flows. Interest coverage, as defined by recurring EBITDA over total interest expense (including capitalized interest), was 2.9 times (x) for the first six months of 2007, compared to 2.7x in 2006, 3.0x in 2005, and 3.2x in 2004. Fixed charge coverage, as defined by recurring EBITDA less capitalized expenditures over total interest plus preferred dividends, was 2.5x for the first six months of 2007, 2.3x in 2006, 2.5x in 2005, and 2.6x in 2004.

NHP has limited debt maturities remaining over the next several years, minimizing refinancing risk. The company has significant financial flexibility from its sizable unencumbered asset pool. As of June 30, 2007, this pool included 382 assets representing approximately $2.5 billion in undepreciated book value. Fitch calculates NHP's unencumbered asset coverage of unsecured debt to be roughly 2.3x, which is solid for the rating category.

Fitch's primary credit concerns stem from the tenant concentration within NHP's portfolio. NHP's top five tenants represented 49% of total revenue for the second quarter of 2007. The company's top operator, Brookdale Senior Living, Inc. (Ticker:BKD), represented 18% of NHP's total revenue and the company's second largest operator, Hearthstone Senior Services, L.P., represented 12% of total revenue. While Fitch believes that both are quality operators, Fitch would view a reduction in the percentage of revenue generated from these operators to be a credit positive.

Based in Newport Beach, California, Nationwide Health Properties is a self-managed and self-administered real estate investment trust (REIT). The company specializes in investments in healthcare related senior housing, long-term care properties, and medical office buildings throughout the United States. As of June 30, 2007, the company had gross investments of approximately $3.2 billion in 519 health care facilities in 43 states.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.