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Fitch Ratings places 'A-' rating on Orange bonds.

Austin: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, placed the 'A-' rating on $16,704,474 of series 2012 health care facilities revenue refunding bonds issued by the Orange County Health Facilities Authority, FL on behalf of Mayflower Retirement Center, Inc. (Mayflower) on Rating Watch Negative.

The Rating Watch Negative reflects Fitch's concern over Mayflower's expected sizeable debt issuance to fund a capital expansion. Debt levels are likely to at least triple, which absent significant offsetting revenue, would increase the long term risk to the overall credit profile. Debt payments are secured by a pledge of the gross revenues of the obligated group and a mortgage on all property, excluding only the property that was purchased and is being held for potential growth. In addition, a fully funded debt service reserve fund provides additional security for bondholders.

ILU occupancy remains above 90% over the past three years. Occupancy in ALUs and SNF of 96% and 91% respectively in 2017 also remained strong. Consistently strong occupancy in the competitive Winter Park market environment is a testament to Mayflower's strong market position.

Mayflower is in the design stages of a sizable multi-year project to address its aging infrastructure and bolster its competitive position. The project will include skilled nursing (SNF) replacement, assisted living unit (ALU) renovation and expansion, independent living unit (ILU) and memory care additions, and common area renovations. While Fitch expects investments to improve Mayflower's competitive position, the overall rating impact could be negative depending on execution details.

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Publication:Daily the Pak Banker (Lahore, Pakistan)
Date:May 15, 2018
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