S&P upgrades Omega, rates notes BB-

Standard & Poor's upgraded Omega Healthcare Investors, Inc. including raising its $100 million 6.95% senior unsecured notes due 2007 to BB- from B and its preferred stock to B from B-. The ratings were removed from CreditWatch positive. The outlook is stable. S&P also assigned a BB- rating to Omega's recently issued $200 million 7% senior notes due April 2014.

S&P said the actions follow a series of completed transactions that results in a material reduction in encumbered assets and encumbered income.

The new senior unsecured note issuance paved the way for Omega to complete a new $125 million secured revolver. The new revolver replaces a larger, more highly secured $225 million revolver. Due to the level of encumbrance associated with the previous revolver, S&P was required to rate it two notches below the company's corporate credit rating.

Pro forma for these transactions, assuming a fully drawn facility (with funds used to purchase assets), secured debt-to-undepreciated real estate investments would be approximately 15%, and encumbered real estate investments and encumbered income would decline to roughly 25% and 30%, respectively. As a result, the senior unsecured rating is now the same as the company's corporate credit rating.

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