S&P lifts Medical Properties to stable

Standard & Poor’s said it raised the corporate credit rating on Medical Properties Trust Inc. to BB+ from BB and revised the outlook to stable from positive.

The agency also said it revised the recovery rating on the company’s senior unsecured debt to 2 from 3 and raised the rating on this debt to BBB- from BB.

The rating is one notch above the corporate credit rating as a result of the revised recovery rating. The 2 recovery reflects 70% to 90% expected default recovery.

The upgrade reflects the increased scale of the trust’s portfolio. The larger portfolio provides greater cash flow diversity while also providing good rent protection given the sound rent coverage and modest lease rollover exposure, S&P said.

The company has grown its portfolio substantially enough that its concentration risk has decreased such that no single asset consists of more than 2.6% of the portfolio, the agency said.

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