S&P cuts HCP outlook to negative

Standard & Poor's said it revised its outlook on HCP Inc. to negative from stable.

At the same time, S&P said it affirmed its BBB corporate credit rating and all existing debt ratings on the company.

"The outlook revision acknowledges an increasingly opportunistic and more aggressive investment and financing strategy for this large, diversified health care REIT," said S&P credit analyst George Skoufis.

"Our rating actions follow HCP's announcement that it will draw on its revolver to fund a sizable investment in the first-loss tranches of the $4.6 billion in property-related debt that is part of the financing for the leveraged buyout of Manor Care Inc., now HCR HealthCare LLC."

According to the agency, HCP remains very opportunistic and increasingly willing to make sizable, leveraged investments and S&P said it would lower the ratings if HCP does not repay revolver borrowings with proceeds from asset sales and/or an equity issuance, or if it pursues similar additional investments with debt.

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