Moody’s changes Omega to stable, reviews Aviv

Moody's Investors Service said it affirmed Omega Healthcare Investors, Inc.'s senior unsecured rating at Ba1 and revised the outlook to positive from stable following the announcement that it has agreed to merge with Aviv REIT Inc. in an all-stock transaction.

The agency simultaneously placed Ba3 senior unsecured debt ratings of Aviv Healthcare Properties Ltd. Partnership, a subsidiary of Aviv REIT, on review for upgrade.

Aviv shareholders will receive 0.90 shares of Omega stock for each of their shares or units. The transaction is expected to close in first quarter 2015.

Moody’s said Omega's positive outlook reflects the numerous benefits arising from its proposed combination with Aviv, including increased scale, enhanced tenant and geographic diversification, and an expanded pool of tenant relationships that will drive its continued growth. As the leading SNF-focused REIT, Omega will be even better positioned to finance sale-leaseback/mortgage transactions with operators looking to consolidate within the highly fragmented skilled nursing industry, the agency said.

Aviv's review for upgrade reflects Moody's expectation that it will upgrade the REIT's ratings once the transaction closes.

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