Fitch rates Healthcare Realty notes BBB

Fitch Ratings said it assigned a BBB rating to the $400 million aggregate principal amount of senior unsecured notes due Jan. 15, 2021 issued by Healthcare Realty Trust Inc., which has an issuer default rating of BBB.

The notes were priced at 99.2% of the principal amount to yield 5.855% to maturity.

The proceeds will be used to repay outstanding balances on the company's unsecured revolving credit facility, provide advance funding for the repayment of the $278 million of 8 1/8% senior notes due May 2011 and for general corporate purposes.

The outlook is negative.

While fixed-charge coverage has deteriorated over the past year, partially due to an increase in the cost of funds, Fitch said it expects that it will improve over the near- to medium-term.

The expected improvement is driven by anticipated de-levering transactions, the lease up of development assets and a full year's contribution to EBITDA from recent acquisitions, the agency said.

The negative outlook centers on the current weak leverage and coverage metrics for the rating, Fitch said, and the uncertainty inherent in future equity raises.

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