Moody’s downgrades HCP debt to Baa2

Moody's Investors Service said it downgraded HCP, Inc.'s senior unsecured debt rating to Baa2 from Baa1.

The outlook was revised to stable from negative.

Moody’s said the downgrade follows the healthcare REIT's announcement that it plans to spin-off its HCR ManorCare portfolio, plus other skilled nursing assets, into an independent, publicly-traded REIT (SpinCo).

HCP's net debt/EBITDA will rise substantially post spin, and the agency expects leverage will remain elevated over the intermediate-term as HCP works to implement its growth strategy, which requires cost-effective access to debt and equity capital.

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