| Global Credit Research |
| Announcement |
| 13 APR 2005 |
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Announcement:
Ventas Inc.
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MOODY'S AFFIRMS VENTAS RATINGS (SENIOR DEBT AT Ba3); OUTLOOK REMAINS POSITIVE |
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Approximately US$525 Million of Securities Affected.New York, April 13, 2005 -- Moody's Investors Service affirmed the ratings of Ventas, Inc. and its affiliates following the announcement that Ventas and Provident Senior Living Trust have decided to merge. The transaction, valued at $1.2 billion, will be funded by Ventas common stock, the assumption of debt and cash. Provident is an unlisted senior living REIT that owns 68 independent and assisted living facilities in 19 states.
Moody's remarked that the planned merger with Provident would be a plus for Ventas along several dimensions. First, Ventas' pro forma exposure to Kindred Healthcare Inc. -- its main tenant -- would be reduced substantially from 76% of revenues in 2004. Moody's also notes that Ventas' key tenant exposure would now be with two tenants: Kindred and Brookdale Living Communities Inc. This material, new exposure to Brookdale is a concern, however. Continued progress in tenant diversification would be a plus. In addition, the Provident transaction would reduce substantially Ventas' exposure to the regulated government reimbursement-based health care segments of skilled nursing facilities and long-term acute care facilities from 84% in 2004.
These positive changes to Ventas' portfolio and tenant composition would be offset by the decline in the REIT's balance sheet strength resulting from this merger, earmarked by a significant rise in both leverage and secured debt. While the rating agency believes this rise in overall and secured debt will be reduced over time, such anticipated reductions would not be adequate to achieve a higher rating for Ventas at this time. In specific, a rating upgrade to Ba2 senior debt would depend on pro forma debt to gross assets being less than 55%, and near-term efforts to reduce pro forma secured debt.
The following ratings were affirmed, with a positive outlook:
Ventas Realty Limited Partnership -- Senior debt at Ba3; senior debt shelf at (P)Ba3; subordinated debt shelf at (P)B2
Ventas, Inc. -- Preferred stock shelf at (P)B2
Ventas Capital Corporation -- senior debt shelf at (P)Ba3; subordinated debt shelf at (P)B2
Ventas, Inc. [NYSE: VTR] is a health care real estate investment trust (REIT) that owns forty long-term acute care hospitals, 201 nursing facility, thirty assisted and independent living facilities, eight medical office buildings, and eight other health care assets, in 39 states.
New York
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© Copyright 2005, Moody's Investors Service, Inc. and/or its licensors including Moody's Assurance Company, Inc. (together, "MOODY'S"). All rights reserved. |
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ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY COPYRIGHT LAW AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, such information is provided "as is" without warranty of any kind and MOODY'S, in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any such information. Under no circumstances shall MOODY'S have any liability to any person or entity for (a) any loss or damage in whole or in part caused by, resulting from, or relating to, any error (negligent or otherwise) or other circumstance or contingency within or outside the control of MOODY'S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, consequential, compensatory or incidental damages whatsoever (including without limitation, lost profits), even if MOODY'S is advised in advance of the possibility of such damages, resulting from the use of or inability to use, any such information. The credit ratings and financial reporting analysis observations, if any, constituting part of the information contained herein are, and must be construed solely as, statements of opinion and not statements of fact or recommendations to purchase, sell or hold any securities. NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER. Each rating or other opinion must be weighed solely as one factor in any investment decision made by or on behalf of any user of the information contained herein, and each such user must accordingly make its own study and evaluation of each security and of each issuer and guarantor of, and each provider of credit support for, each security that it may consider purchasing, holding or selling. MOODY'S hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MOODY'S have, prior to assignment of any rating, agreed to pay to MOODY'S for appraisal and rating services rendered by it fees ranging from $1,500 to $2,400,000. Moody's Corporation (MCO) and its wholly-owned credit rating agency subsidiary, Moody's Investors Service (MIS), also maintain policies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually on Moody's website at www.moodys.com under the heading "Shareholder Relations - Corporate Governance - Director and Shareholder Affiliation Policy." |
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