Fitch revises Ventas outlook to negative

Fitch Ratings said it revised the outlook of Ventas, Inc. to negative and affirmed the ratings with the long-term issuer default rating at BBB+.

“Fitch expects Ventas' operating EBITDA and leverage will be negatively affected by the coronavirus, given that it is a healthcare REIT whose portfolio includes senior housing facilities (53% of net operating income at Dec. 31, 2019),” said Fitch in a press release.

Before the pandemic, Ventas' plan to meet its financial policies relied on dispositions to fund debt repayment to offset oversupply in senior housing that was pressuring operating EBITDA. The pandemic compounds the pressure and the volatility in the capital markets and makes dispositions to fund debt repayment less likely at this time, Fitch said.

“The negative outlook, rather than a downgrade, reflects the pandemic has yet to meaningfully affect operating cash flow and the issuer has the ability, should it choose to do so, to reduce leverage by curtailing investment activity, raising equity proceeds through asset sales and equity issuance (albeit at more expensive terms than earlier in 2020) or reducing the dividend or converting it to stock from cash,” said Fitch.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.