In regards to its $67.5 million California Statewide Communities Development Authority bonds, Episcopal Communities & Services (ECS), a not-for-profit organization, received an ‘A-’ rating from Fitch Ratings, a national credit agency. With this rating, the organization, which provides a broad spectrum of health care and living options for seniors, has been found to be financially stable and a viable investment for financial institutions.
“The A minus rating means that Episcopal Communities & Services will be able access financing at a lower rate, which will make more funds available to reinvest in programs, services and building improvements that will benefit our seniors,” states James Rothrock, Chief Financial Officer for ECS.
The key rating drivers for the assessment were a new corporate structure, high occupancy across its communities, solid liquidity, excellent operating metrics, market positioning, the potential for financial support outside ECS for MonteCedro, and slightly elevated debt burden.
Fitch Ratings found the current ECS management team, who are veterans of the senior living industry, to be very knowledgeable and forward thinking on maintaining ECS’s financial and competitive position. According to the report, ECS’s operating ratio of 89.6 percent was better than the credit agency’s ‘A’ median, which is 95.2 percent. Additionally, ECS’s net operating margin adjusted was 37.6 percent, which is much better than Fitch’s ‘A’ median of 21.9 percent.
The analysis also reviewed the operations and market positioning of ECS’s communities - The Canterbury and The Covington. With occupancies in the 90 percentile across all levels of care in both communities, Fitch viewed this to be a credit strength for the parent organization. Additionally, the analysis found the communities to be attractive with recently renovated amenities and in desirable locations. The Canterbury is located in Palos Verdes and the Covington is in Aliso Viejo.
MonteCedro will be financed as a separate limited liability company without recourse to ECS. ECS is the sponsor for MonteCedro, a senior living community under development in Altadena, Calif. Development funds are administered through ECS’ foundation (the Sophie Miller Foundation). According to the Fitch Ratings report, MonteCedro is currently in pre-sales and is targeted to begin construction and secure permanent financing in July 2013.
To review the Fitch Ratings announcement, please click on the following link - Fitch Rates Episcopal Communities & Services.
For more information about Episcopal Communities & Services, please visit www.ecsforseniors.org or call 626-403-5880.