Moody's downgrades Medical Properties

Moody's Investors Service said it downgraded Medical Properties Trust, Inc.'s corporate family rating to Ba2 from Ba1. Moody's also lowered the backed senior unsecured debt rating, domestic and foreign, of subsidiary MPT Operating Partnership, LP to Ba2 from Ba1.

“The downgrade reflects governance considerations including MPT's high leverage and challenges related to a few of the REIT's largest tenant exposures. The downgrade also reflects MPT's weakened access to the public capital markets as it has seen a steep rise in its capital costs that is hindering its ability to execute on its strategy of financing hospital real estate investments,” Moody’s said in a press release.

The agency said MPT's net debt to EBITDA was at 8.1x for LTM ended the third quarter of 2023, partially due to a decline in rent payments from Prospect Medical Holdings, one of its largest tenants.

The outlook for both entities remains negative.

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