Fitch Affirms Sunnyside Properties, Florida Bonds at 'BBB-'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the 'BBB-' underlying rating on the currently outstanding $3.8 million Sarasota County Health Facilities Authority health facilities revenue refunding bonds, series 1995 (Sunnyside Properties Project). The Rating Outlook is Stable. The rating affirmation reflects Sunnyside Properties' (Sunnyside) solid and consistent profitability, strong occupancy levels, and favorable demand characteristics of the service area. Excess margins have been strong, ranging from 6.2% to 6.7% over fiscal years 2003-2006. For the interim 12 months ended June 30, 2006, Sunnyside had an operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: of 97.6% and excess margin of 6.4%. Demand has been robust with strong occupancy levels in the independent living units, assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. units, and skilled nursing facility skilled nursing facility n. Abbr. SNF An establishment that houses chronically ill, usually elderly patients, and provides long-term nursing care, rehabilitation, and other services. . Sunnyside's historical occupancy has been in the 90% range in all three levels of care due to the favorable demand characteristics of the service area, its market niche for lower- to mid-income retirees, and quality of service. Currently, Sunnyside maintains a waiting list of greater than 400 people. Liquidity levels are good with 315 days cash on hand and cash to debt of 214% at June 30, 2006. Fitch's primary credit concerns are Sunnyside's thin debt service coverage with a high reliance on turnover, future capital needs, and difficult labor market labor market A place where labor is exchanged for wages; an LM is defined by geography, education and technical expertise, occupation, licensure or certification requirements, and job experience . Maximum annual debt service coverage has historically been light; however, it has improved to 1.5 times (x) and 1.9x coverage in fiscals 2005 and 2006, respectively. The increase in debt service coverage is due to higher entrance fees received during the two years and reflects Sunnyside's high reliance on entrance fees to cover debt service. Revenue-only debt service coverage was 0.3x and 0.5x for fiscals 2005 and 2006, respectively. Additional concerns include Sunnyside's preliminary plans to expand the number of independent and assisted living units on its current campus. While current staffing levels at Sunnyside are relatively good, the Florida labor market continues to present challenges for nurse recruitment and retention. The Stable Outlook reflects Fitch's expectation that Sunnyside's sound financial performance will continue due to the strong demand for services. With the series 1995 bonds fully maturing in 2010, management expects any major capital expansion will occur after the outstanding bonds are retired. Located in Sarasota, Florida, Sunnyside is a type B continuing care continuing care a professional convention that a veterinarian who is treating an animal is obliged to continue treating that case unless an arrangement is made with its custodian to transfer the care to another practitioner or to a specialist. retirement community with 226 independent living apartments, 37 assisted living units, and a 60-bed nursing center. Disclosure to Fitch has been good in terms of content and timeliness. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion