The Rating Outlook is Stable.
The bonds are secured by a gross revenue pledge, a mortgage lien on Christian Care's property, and a debt service reserve fund.
KEY RATING DRIVERS
STABLE OPERATING RESULTS: Christian Care's financial profile has been relatively consistent over the last four years with an operating ratio between 91%-94% (fiscal 2010-2013;
GOOD OCCUPANCY: Occupancy remained good at or above 86% across the continuum of care over the last three years.
SOLID DEBT SERVICE COVERAGE: Christian Care's current debt burden is relatively light for the category with maximum annual debt service (MADS) comprising 8.5% of total fiscal 2013 revenue compared with the 'BBB' category of 12.4%. MADS coverage of 2.1x for fiscal 2013 and 2.9x through the three month interim ended
IMPROVED PAYOR MIX: Christian Care has significantly reduced its exposure to governmental payors with the sale of one of its nursing homes in 2013. The percentage of net revenue from
CAPITAL PROJECT UNDERWAY: Christian Care is moving forward with the construction of a satellite campus in
Located around the
Christian Care's financial performance is characterized by a solid history of good operating performance and steady debt service coverage. In fiscal 2013 operating ratio was 93.8%, remaining favorable to the 'BBB' category median of 97.2%. Net operating margin of 10.2% during the same time period compares well to the 'BBB' category median of 9.9%. Adjusted net operating margin was only 12.1% in fiscal 2013 reflecting the significant percentage of rental ILUs (about 80%) compared to entrance fees (about 20%). Christian Care is budgeting about
MADS equates to a manageable 8.5% of fiscal 2013 revenues, which remains favorable to the 'BBB' category median of 12.4%. MADS coverage by turnover entrance fees of 2.9x at
Liquidity metrics are mixed. At
CAPITAL PROJECT MOVING FORWARD
Christian Care is undertaking a sizable capital project on a satellite campus in
STABLE HISTORICAL OCCUPANCY
Historical occupancy across each level of care has been relatively consistent over the past three years (2011 - 2013), averaging 88.4% for ILUs, 90.6% for ALUs and 91.4% for the SNF units. At
MANAGEABLE DEBT BURDEN
Total outstanding debt is about
Christian Care covenants to provide annual and quarterly financial and utilization statements to the Municipal Securities Rulemaking Board's EMMA system.
Additional information is available at 'www.fitchratings.com'.
--'Revenue-Supported Rating Criteria' (
--'Rating Guidelines for Nonprofit Continuing Care Retirement Communities' (
Revenue-Supported Rating Criteria
Not-for-Profit Continuing Care Retirement Communities Rating Criteria
Source: Fitch Ratings
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