Moody's rates Sabra notes B2

Moody's Investors Service said it assigned B2 ratings to Sabra Health Care REIT, Inc.'s prospective $225 million senior unsecured notes offering due 2018 and a B2 corporate family rating to the company.

The outlook is stable.

Proceeds from Sabra's planned notes offering will be used, together with cash from Sun Healthcare Group, Inc., to redeem Sun's existing 9 1/8% senior subordinated notes.

Sabra's ratings reflect the company's small size, early stage of growth, concentration in skilled nursing facilities, which are heavily dependent on government reimbursements, and 100% tenant concentration with SHG Services, Inc., a subsidiary of Sun Healthcare Group, Moody's said.

Positively, the agency said that Sabra's portfolio is reasonably diversified across 19 states, which reduces its exposure to severe budget cuts from any one state. Sabra's also has a predictable cash flow from its long-term triple net leases and negligible debt maturities until 2013.

The debt-to-EBITDA ratio is 1.6 times.

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