Fitch Upgrades Cathedral Village (PA) Revs to 'BBB+'; Removes Rating Watch Positive

NEW YORK--()--Fitch Ratings has upgraded to 'BBB+' from 'BBB-' the ratings on the following bonds issued on behalf of Cathedral Village (CV):

--$9,165,000 of Philadelphia Authority for Industrial Development Revenue Bonds (Cathedral Village Project) series 2013;

--$650,000 of Philadelphia Authority for Industrial Development Revenue Bonds (Cathedral Village Project), series 2003A and 2003B.

The Rating Watch Positive has been removed, and the Rating Outlook is Stable.

KEY RATING DRIVERS

The rating upgrade to 'BBB+' reflects the inclusion of CV into the Presbyterian Homes Obligated Group (PHOG, rated 'BBB+'; Stable Outlook by Fitch), and the related substitution of security. CV and Presbyterian Senior Living, the parent company of PHOG, signed a definitive affiliation agreement on Feb. 9, 2015. The closing on the affiliation was consummated on June 1, 2015 when CV joined as a member of PHOG.

Cathedral Village is a Type-A continuing care retirement community located in Philadelphia, PA. The community consists of 293 ILUs (50 of which are eligible to be utilized as personal care units) and 133 skilled nursing beds. In FY 2014, Cathedral Village had operating revenues of approximately $23.7 million.

Presbyterian Homes Obligated Group is comprised of 17 separate continuing care retirement communities/long term care facilities located throughout Pennsylvania and locations in Ohio and Delaware. In aggregate, PHOG operates 1,121 independent living units, 462 assisted living units and 1,088 skilled nursing beds. The organization operates a wide variety of facilities including entrance fee CCRCs, stand-alone skilled nursing and personal care facilities, and rental independent living units. PHOG generated total revenues of $172.8 million in fiscal 2014.

For more information please see Fitch's press release 'Fitch Affirms Presbyterian Homes Obligated Group (PA) Revs at 'BBB+'; Outlook Stable' dated March 27, 2015.

RATING SENSITIVITIES

STABILITY EXPECTED: Fitch expects Presbyterian Homes Obligated Group to absorb the impact of the Cathedral Village acquisition and continue producing stable financial metrics, supported by its diverse revenue base and historically strong occupancy trends.

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

Applicable Criteria

Revenue-Supported Rating Criteria (pub. 16 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750012

U.S. Nonprofit Hospitals and Health Systems Rating Criteria (pub. 30 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746860

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=985968

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Dmitry Feofilaktov
Analyst
+1-212-908-0345
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Gary Sokolow
Director
+1-212-908-9186
or
Committee Chairperson
Jim LeBuhn
Senior Director
+1-312-368-2059
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Dmitry Feofilaktov
Analyst
+1-212-908-0345
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Gary Sokolow
Director
+1-212-908-9186
or
Committee Chairperson
Jim LeBuhn
Senior Director
+1-312-368-2059
or
Media Relations:
Elizabeth Fogerty, New York, +1 212-908-0526
Email: elizabeth.fogerty@fitchratings.com
Sandro Scenga, New York, +1 212-908-0278
Email: sandro.scenga@fitchratings.com