S&P downgrades Quality Care, facility, notes

S&P said it lowered the corporate credit rating on Quality Care Properties Inc. (QCP) and its wholly owned subsidiaries, SNF West Sub-REIT, SNF Central Sub-REIT, SNF East Sub-REIT and AL Sub-REIT to B from B+.

The ratings remain on CreditWatch with negative implications.

At the same time, the agency downgraded the issue-level ratings on the first-lien credit facility to BB- from BB. The recovery rating is 1, indicating an expectation for very high recovery (90% to 100%; rounded estimate: 95%) in the event of default.

S&P also lowered the issue-level rating on the second-lien notes to B+ from BB-. The recovery rating is 2, indicating an expectation for substantial recovery (70% to 90%; rounded estimate: 80%) recovery.

"The downgrade reflects our view that rent payments from QCP's largest tenant HCR III LLC could be substantially lower than our previous expectations, which we expect to result in further strained credit protection measures as well as potential liquidity pressure," S&P credit analyst Sarah F Sherman said in a news release.

HCR is currently in technical default under its term loan and its lenders accelerated repayment on the loans.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.