March 14, 2012 / 7:03 PM / 5 years ago

S&P:AVIV SR UNSEC RTG UNCHANGED AFTER ISSUING $75M SR NOTES

(The following statement was released by the rating agency)	
	
OVERVIEW	
 	
     -- Aviv REIT Inc. issued $75 million in an add-on offering of 7.75% 	
senior unsecured notes due 2019. Our 'B+' senior unsecured rating is 	
unaffected.	
     -- The Chicago, Ill.-based company plans to use the proceeds from the 	
offering to repay roughly $72 million under the existing secured acquisition 	
facility.	
     -- The transaction reduces Aviv's secured debt to 38% of total 	
outstanding debt from 100% at year-end 2010.	
 	
March 14 - Standard & Poor's Ratings Services today said that its 'B+' rating
for Aviv REIT Inc.'s (Aviv's) senior unsecured notes is unaffected by the
company's add-on offering of $75 million senior unsecured notes. The notes have
a 7.75% coupon and mature on Feb. 15, 2019. The company will use proceeds to
repay roughly $72 million under the existing secured acquisition facility. The
offering is the second add-on to the company's $200 million senior unsecured
issue on Feb. 4, 2011.	
	
Chicago-based Aviv is a private owner of skilled nursing facilities in the 	
U.S., with 225 owned or managed properties housing 20,875 licensed beds. The 	
company finances predominantly local and regional nursing home operators 	
through the sale and leaseback of properties with long-term triple-net leases. 	
Aviv is among the smallest of the REITs we rate and has an undepreciated book 	
asset value of approximately $1 billion, which equates to a moderate $44,000 	
average cost per bed. However, the company maintains a geographically diverse 	
portfolio of properties in 26 states with concentrations in California (17%), 	
Texas (13%), Ohio (9%), Arkansas (8%), Pennsylvania (8%), and Missouri (7%).	
	
The transaction reduces Aviv's secured debt to 38% of total outstanding debt 	
from 100% at year-end 2010. While the company's interest costs will increase 	
due to this add-on, we believe that Aviv's credit profile will ultimately 	
benefit from the reduction in floating-rate debt and additional progress 	
unencumbering its asset base. For more information on our rating on Aviv REIT, 	
see our full analysis, "Aviv REIT Inc.," published Feb. 13, 2012, on 	
RatingsDirect on the Global Credit Portal.	
 	
 	
 	
Ratings List	
	
Ratings Outstanding	
	
Aviv REIT Inc./	
Aviv Healthcare Properties L.P./	
Aviv Healthcare Capital Corp.	
Corporate credit       B+/Stable/--	
  Senior unsecured     B+	
   Recovery rating     3	
	
 (Caryn Trokie, New York Ratings Unit)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below