Fitch Rates Asbury Communities' (MD) 2014 Revs 'BBB'; Affirms Outstanding; Outlook Stable

NEW YORK--()--Fitch Ratings has assigned a 'BBB' rating to expected issuance of the following $15.3 million of city of Gaithersburg, Maryland Economic Development refunding revenue bonds (Asbury Maryland Obligated Group) series 2014 issued by the city of Gaithersburg on behalf of the Maryland Obligated Group of Asbury Communities (Asbury-MD). In addition, Fitch affirms the following parity debt also issued by the city of Gaithersburg, MD at 'BBB':

--$84,735,000 refunding revenue bonds, series 2006A;

--$44,245,000 refunding revenue bonds, series 2009B;

--$16,000,000 revenue bonds, series 2009A.

The Rating Outlook is Stable.

The bonds will be a private placement and refinance Asbury-MD's 2009A bonds. The bonds have a bullet maturity in seven years and the interest rate is fixed over the seven years.

SECURITY

The bonds are secured by a pledge of gross revenues, a mortgage, and a funded debt service reserve.

KEY RATING DRIVERS

GOOD ENTRANCE FEE YEAR: In spite of a higher level of turnover that pressured operating performance in 2013, Asbury-MD ended the year with $20.1 million in entrance fees (unaudited figures), which was up from $11.8 million in 2012, and supported solid debt service coverage of 2.3x.

RATING SENSITIVITIES

STABILITY EXPECTED: Fitch believes Asbury-MD's operating performance will remain stable in 2014.

For more information on Asbury-MD, please see the press release, 'Fitch Affirms Asbury Communities' (MD) Revs at 'BBB'; Outlook Stable', dated Dec. 3. 2013 and available at www.fitchratings.com.

CREDIT PROFILE

The Maryland Obligated Group consists of Asbury Methodist Village (AMV) and Solomons and has a total of 1,127 independent living (IL) units, 157 assisted living units and 305 skilled nursing beds.

Disclosure

Asbury-MD has covenanted to provide annual audits and quarterly unaudited financial information through EMMA, and also provides voluntary quarterly disclosure calls for investors. Disclosure to Fitch has been very good to date with quarterly disclosure that includes detailed financial statements, utilization statistics, and a brief management discussion and analysis section.

Additional information is available at 'www.fitchratings.com'

This action was informed by the sources of information identified in Fitch's Revenue-Supported Rating Criteria.

Applicable Criteria and Related Research:

--'Rating Guidelines for Nonprofit Continuing Care Retirement Communities' dated July 10, 2013.

Applicable Criteria and Related Research:

Rating Guidelines for Nonprofit Continuing Care Retirement Communities

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=40171

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=826284

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Contacts

Fitch Ratings
Primary Analyst
Gary Sokolow, +1-212-908-9186
Director
Fitch Ratings, Inc.
One State Street Plaza,
New York, NY 10004
or
Secondary Analyst
Emily Wadhwani, +1-312-368-3347
Director
or
Committee Chairperson
Eva Thein, +1-212-908-0674
Senior Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst
Gary Sokolow, +1-212-908-9186
Director
Fitch Ratings, Inc.
One State Street Plaza,
New York, NY 10004
or
Secondary Analyst
Emily Wadhwani, +1-312-368-3347
Director
or
Committee Chairperson
Eva Thein, +1-212-908-0674
Senior Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526 (New York)
elizabeth.fogerty@fitchratings.com