Moody's Investors Service upgraded HCP Inc.'s senior unsecured debt rating to Baa1 from Baa2.

The outlook remains stable.

The upgrade reflects the healthcare real estate investment trust's progress in repositioning its portfolio that has resulted in improved asset quality and enabled it to reduce leverage, Moody's noted.

The rating agency also noted that HCP's three core segments — senior housing, medical office buildings and life sciences — derive a majority of their income from private pay sources and have very low exposure to government reimbursement risk. The outlook for the company's high-quality medical office building and life sciences portfolios remains strong, offsetting the expected challenges in the senior housing sector in 2019.