Fitch Downgrades Presbyterian Villages of Michigan to 'BB+'; Outlook Negative.CHICAGO -- 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. downgrades to 'BB+' from 'BBB-' approximately $34.05 million Michigan State Hospital Finance Authority revenue and refunding bonds series 2005 (Presbyterian Villages of Michigan Obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. Group). The Rating Outlook remains Negative. The downgrade to 'BB+' reflects Presbyterian Villages of Michigan's (PVM (Parallel Virtual Machine) Software that enables multiple Unix and Windows NT/2000 computers to function as one large, parallel machine. It is used to solve scientific, industrial and medical problems around the world. For information, visit www.epm.ornl.gov/pvm. ) poor bottom-line performance in fiscal 2005 (ended Dec. 31) and through the second quarter ended June 30, weakening liquidity ratios, and a material increase in total expenses after several years of tight expense control. For fiscal 2005, PVM reported a negative excess margin of 2.8% (not including the loss on refinancing) as compared to a positive 3.6% in the year-earlier period. For the six months ended June 30, 2006 PVM's net income loss of $994,000 is more than double the year-earlier period and reflects a negative excess margin of 6.4%. Unrestricted cash and investments of $10.5 million at June 30, 2006 is approximately $2.2 million lower than at fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 2005 due to working capital advances to non-obligated members and certain pre-development advances at the Village of East Harbor. Thus, PVM's days cash on hand has fallen to 128 at June 30 from 161 at the end of 2005 while cash to debt has weakened to 31% from 39% over the same period. As planned, management reported that $600,000 has been drawn from a bank facility to fund the Green House construction due to the timing of capital campaign receipts from both contributions and pledges slated for completion by mid-2007. Budgeted revenue growth has not materialized, while investments in personnel and programs have caused expense growth to accelerate after two years of tight control. Total expenses increased 7.5% in 2005 after two years of flat growth. Through the second quarter of 2006, total expenses are 5.8% higher compared to the year earlier period while total revenues have increased just 2.2% over the same period. Fitch's Negative Outlook reflects a more difficult operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. and a belief that management's initiatives to improve financial results will take longer to materialize. A softening in the area real estate market has made marketing of PVM's units more challenging while greater competition for residents has required PVM, in part, to adjust pricing for certain units. Management is forecasting break-even results for fiscal 2006. While Fitch is encouraged by management's initiatives to improve financial results, we believe forecasted results may be somewhat aggressive. An inability to stabilize operations and improve balance sheet indicators could lead to further rating pressure. Headquartered in Southfield, MI, the PVM Obligated Group consists of three rental 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 communities located in Redford, Westland and Chesterfield Township Chesterfield Township can refer to:
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 178 skilled nursing beds. In addition, PVM owns or manages approximately 1,200 independent living and 20 assisted living units through non-obligated entities. PVM has covenanted to provide annual audited financial statements and quarterly unaudited financials to the NRMSIRs. Fitch notes that PVM's disclosure practices have been excellent. 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. |
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