Moody's: Sabra preferreds B3

Moody's Investors Service said it assigned a B3 rating to the proposed $50 million preferred stock of Sabra Health Care REIT, Inc.

The outlook remains stable.

The proceeds are expected to be used to reduce the balance on the REIT's secured revolving credit facility, Moody's said.

The preferred stock rating reflects the standard notching practice for REITs with senior unsecured ratings below Ba2, the agency said.

Sabra's B1 senior unsecured and B1 corporate family ratings reflect the company's small size, early stage of growth and tenant concentration with Genesis HealthCare LLC, Moody's said.

Sabra's asset-type concentration in skilled nursing facilities also remains a key credit challenge as this sector is highly regulated and dependent on government reimbursements through Medicare and Medicaid, the agency said.

As key credit strengths, Moody's noted that Sabra has demonstrated substantial progress in growing its portfolio and reducing its former 100% tenant concentration.

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