Fitch Ratings affirmed its long-term issuer default rating and long-term senior unsecured rating on Omega Healthcare Investors Inc. at BBB- and its long-term subordinated rating at BB+, with a stable outlook.
The action factored in the healthcare real estate investment trust's solid financial metrics, established capital access, increased focus on acquisitions and average operator lease coverage. These factors are partially offset by the REIT's emphasis on skilled nursing and assisted living facilities.
Fitch noted that challenged tenants, most recently including Diversicare Healthcare Services Inc. and Daybreak Venture LLC, present ongoing issues to Omega.
The stable outlook takes into account the agency's expectation that Omega's leverage will remain in the 5x to 5.5x range through the cycle and that the impact to its cash flows from any pressures to operators' profitability will likely be manageable.
