CCRC outlook stable for third consecutive year

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The outlook for continuing care retirement communities is stable for the third consecutive year, according to a new Fitch Ratings report.

The report, "2015 Median Ratios for Nonprofit Continuing Care Retirement Communities," predicts continued stability for the remainder of 2015 and 2016.

Fitch's investment-grade median ratios showed further improvement in CCRC core operating performance. Within the A and BBB rating categories, median ratios stayed mostly unchanged, whereas median profitability ratios were slightly better for A-rated CCRCs. Median capital spending across all rating categories showed a sharp increase in 2014, with the investment-grade median increasing to 106.6% last year from 86.4% in 2013. Capital spending increased the most for A- (to 124.7% from 107.9% in 2013) and BBB-rated CCRCs (to 106.2% from 79.7%).

The broader housing recovery, with home prices increasing and mortgage delinquency rates continuing to decrease, also contributed to the improved CCRC performance, according to the report.

"The largest driver of negative rating pressure for CCRCs continues to be the impact of additional debt issued to fund campus renovations or expansions," Senior Director James LeBuhn said in a statement.


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