S&P rates Quality Care loan BB, notes BB-

S&P said it assigned a B+ corporate credit rating to Quality Care Properties Inc.

The outlook is stable.

The agency also said it assigned a BB rating and 1 recovery rating to the company’s $1 billion first-lien term loan and $100 million revolver.

The 1 recovery rating indicates 90% to 100% expected default recovery.

S&P also said it assigned a BB- rating and 2 recovery rating to Quality Care Properties’ $750 million second-lien notes. The 2 recovery rating indicates 70% to 90% expected default recovery.

The borrowers of the credit facility will be SNF West Sub-REIT, SNF Central Sub-REIT, SNF East Sub-REIT and AL Sub-REIT, the agency noted.

The proceeds will be used to fund a spin-off transaction from HCP Inc. through a tax-efficient distribution to HCP shareholders in the third quarter of 2016, S&P said.

After the spin-off, Quality Care will be an independent publicly traded company that owns, manages and acquires health care-related real estate properties, the agency said.

The ratings consider the company’s significant market position, reimbursement risks and concentrated tenant base, S&P said.

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