Fitch Publishes Credit Analysis On Omega Healthcare Investors

Business Wire, Oct 29, 2004

NEW YORK -- Fitch Ratings has published a credit analysis report on Omega Healthcare Investors, Inc. (Omega) providing insight into Fitch's rationale for its ratings of 'BB-' for the company's $300 million of outstanding senior unsecured notes and the 'B' for the $168 million of preferred stock. The Rating Outlook is Stable.

On Sept. 10, 2004, Fitch Ratings upgraded Omega Healthcare Investors, Inc.'s (Omega) ratings to reflect the company's improving financial profile and operating performance in recent quarters. Omega increased EBITDA coverage of total interest expense to 3.3 times (x) for the quarter ended Sept. 30, 2004, from 2.1x reported at the end of 2002. The company has averaged mid 3.0x coverage since the third quarter of 2003. Similarly, Omega's fixed-charge coverage during that same period improved to 2.1x from 1.2x. Omega's total debt leverage is 38.9% (as a percentage of total undepreciated book capital) as of Sept. 30, 2004, and 58.2% when adding total preferred securities to the equation.

During the first half of 2004, Omega significantly improved its funding and liquidity profile by redeeming high coupon preferreds, refinancing its variable-rate debt through the issuance of $200 million of 7%, 10-year senior unsecured notes and closing a new $175 million secured revolving credit facility. Omega has a manageable debt-maturity schedule with no significant debt maturities until August 2007 when the company's $100 million 6.95% senior notes come due. Fitch expects continued maintenance of these ratios and anticipates improvement in the company's financial performance as the operators and assets strengthen within the portfolio.

Omega is a real estate investment trust (REIT), providing financing and capital to the long-term health care industry with a particular focus on skilled nursing facilities (SNFs) located in the United States. As of Sept. 30, 2004, the company owned or held mortgages on 205 SNFs and assisted living facilities with approximately 21,900 beds located in 29 states and operated by 39 third-party health care operating companies.

For a copy of the credit analysis, visit the Fitch Ratings web site at 'www.fitchratings.com'.