Fitch Ratings downgrades to 'BB' from 'BBB-' and withdraws the long-term rating rating on Wesley Enhanced Living's (WEL) outstanding series 2005A and B variable rate demand bonds issued by Langhorne Manor Higher Education & Health Authority (PA).
The rating withdrawal reflects management's decision to stop participating in the rating process. As a result, Fitch no longer has sufficient information to maintain the ratings. Accordingly, Fitch will no longer provide ratings or analytical coverage for WEL.
The downgrade to 'BB' from 'BBB-' reflects the decline in WEL's unrestricted cash and investment position to $7.4 million at Dec. 31, 2009 from $16 million at Dec. 31, 2006. As a result, liquidity metrics are no longer consistent with 'BBB' category medians (148.8 days cash on hand and 20.8% cash to debt). Furthermore, all of WEL's debt ($35.4 million) is structured as variable rate variable rate demand bonds, which exposes the organization to put, remarketing and bank renewal risk.
In addition, Fitch has withdrawn the 'F1+' short-term rating, which was assigned incorrectly.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Revenue-Supported Rating Criteria', dated Oct. 8, 2010;
--'Rating Guidelines for Nonprofit Continuing Care Retirement Communities', dated Dec. 15, 2008.
For information on Build America Bonds, visit 'www.fitchratings.com/BABs'.
Applicable Criteria and Related Research:
Revenue-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=564565
Rating Guidelines For Nonprofit Continuing Care Retirement Communities
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=418608
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