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Fitch Affirms Mary Wade Home (Connecticut) Revs at 'A-'; Outlook Revised to Negative
NEW YORK-(Business Wire)-September 4, 2008 - Fitch Ratings affirms its 'A-' rating on the Connecticut Development Authority's outstanding $3.35 million first mortgage gross revenue health care project bonds (The Mary Wade Home, Inc. Project), series 1999A. The Rating Outlook is revised to Negative from Stable.
The Rating Outlook revision to Negative reflects anticipated increased debt burden and construction and operational risk associated with Mary Wade Home's (Mary Wade) planned expansion of its skilled nursing facility (SNF) to 94 beds from 60, and renovation of its existing beds. The project is estimated to cost $12 million with approximately $10.5 million to be funded through debt and the balance to be funded through equity contribution. Mary Wade has already received a certificate of need (CON) approval and adjusted Medicaid rates from Connecticut's Office of CON Approval and Rate Setting of the Department of Social Services. The project is expected to commence in the spring of 2009 and be completed by the fall of 2010.
The Negative Rating Outlook will be resolved when the project construction becomes imminent and financing details become clearer. If the project does occur as planned, Fitch will evaluate the financing structure and its impact on the balance sheet and Mary Wade's ability to service the increased debt service. Fitch notes that although a downgrade pressure is likely due to the project, downgrade is not certain given Mary Wade's excellent demand indicators and exceptional liquidity which support the rating affirmation at 'A-'. As of June 30, 2008, Mary Wade had 616 days cash on hand, 14.7% debt-to-capitalization, and 99.6% SNF occupancy.
The Mary Wade Home, Inc. operates 60 skilled nursing beds and 45 residential living units as well as an outpatient rehabilitation clinic and an adult day care program in New Haven, Connecticut. Total annual operating revenue in fiscal 2007 was $8.6 million. Mary Wade submits annual continuing disclosure, which includes an audited financial statement, operating statistics, and management discussion and analysis, to the Nationally Recognized Municipal Securities Information Repositories. Quarterly disclosure is disseminated to concerned parties.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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