2009-10-09 22:00:03 -
Fitch Ratings has affirmed the underlying ratings on Moorings Park's $17.8 million series 2000 bonds, $27 million series 2005 bonds and $34.8 million series 2008 bonds issued by the Collier County, FL Health Facilities Authority. All three series of bonds are backed by direct pay letters of credit (LOCs) from Wachovia Bank. The underlying Rating Outlook is Stable.
The 'A+' rating is supported by The Moorings excellent liquidity position as evidenced by days cash on hand of 879 days at June 30, 2009 and cash to debt of 125%, sound operating performance which has led to solid debt service coverage of over 8.1 times (x) in 2008, a long and successful operating history dating back to 1981, experienced management and strong
service area characteristics. The Moorings has consistently had occupancy rates above 90% in their independent living and health care areas over the past seven years which has resulted in solid profitability and strong debt service coverage that has consistently been higher than Fitch's median for 'A' rated facilities. In fiscal year 2008, The Moorings had solid all-in debt service coverage of 8.1x; coverage for the six months ended June 30, 2009 fell to 3.8x due to the timing of entrance fee receipts. Fitch views the facility's long operating history as a main strength and as an indication of the favorable reputation The Moorings enjoys in the market. The City of Naples has outstanding characteristics for a retirement community (i.e.
elderly population and wealth indicators) and is rated 'AAA' by Fitch.
Fitch's main credit concerns include the inherent risks associated with Type A contracts (i.e. health care liability) and, given the recent events in the market, The Moorings' debt structure being 100% variable rate. The LOCs on each of The Moorings' outstanding bond issues expires in 2013 and has term out provisions of the lesser of five years or the expiration of the LOC. Although the exposure to variable rate debt is a concern, Fitch believes that The Moorings' strong liquidity position helps mitigate this risk as variable rate debt could be paid off or converted to fixed rate if necessary. The Moorings entered into a fixed-payor swap on the 2008 variable rate demand bonds, synthetically converting the bonds to fixed rate. The mark-to-market value of the swap as of Sept. 30 is negative $1,400,821. There are no collateral posting requirements; Wachovia is the counterparty. Fitch has not reviewed the swap documents.
The Stable Rating Outlook assumes continued sound operating performance and stable occupancy rates in both independent living and skilled nursing. Fitch expects liquidity and debt service coverage to remain relatively constant over the near-term.
The Moorings is a type-A continuing care retirement community located in Naples, FL. The community consists of 365 independent living units, 74 assisted living apartments and 106 skilled nursing beds. In the year ended Dec. 31, 2008, The Moorings had total revenues of approximately $48.1 million.
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Fitch RatingsJim Mitchell, +1-813-222-1395 (Tampa)Paul
Rizzo, +1-800-753-4824 (New York)orBrian Bertsch,
+1-212-908-0549(Media Relations, New York)
brian.bertsch@fitchratings.com : mailto:brian.bertsch@fitchratings.com Sandro
Scenga, +1-212-908-0278(Media Relations, New York)
sandro.scenga@fitchratings.com : mailto:sandro.scenga@fitchratings.com
