Fitch Rates Health Care Property Investors' $250MM Senior Notes 'BBB+'

Business Wire, April 27, 2005

NEW YORK -- Fitch Ratings has assigned a 'BBB ' rating to a recent offering of $250 million 5.625% 12-year senior unsecured notes issued by Health Care Property Investors, Inc. (NYSE:HCP). Proceeds will primarily be used to repay outstanding variable rate line balances on the company's unsecured bank credit facility. The Rating Outlook is Stable.

The 'BBB ' rating continues to reflect favorably on HCP's long operating history, its capable and seasoned management team, and balanced investment strategy with investments in medical office buildings (27% of invested capital at book value), assisted living facilities and continuing care retirement communities (26%), acute care hospitals (22%), and skilled nursing facilities (20%). Additionally, Fitch views positively the company's debt service coverage measuring greater than 3.0 times (x) for the last two years and its manageable use of debt leverage at 41.7% of undepreciated book capital as of Dec. 31, 2004.

Pro forma this offering, the company's debt service coverage ratio for year-end 2004 drops slightly to 3.6x from the pre-offering-calculated 3.9x. The decrease in coverage is a result of converting $250 million of debt from an approximate 3.14% variable rate to a 5.63% fixed rate. This coverage metric continues to be adequate for the rating category. This transaction significantly reduces the company's exposure to variable rate debt and terms out line of credit borrowings with long-term debt, which Fitch views as a credit positive. The company's debt leverage as of Dec. 31, 2004 was 41.7% of undepreciated book capital. Including preferred stock, debt leverage plus preferred equals 49.7% of undepreciated book, in line with the company's three-year average.

Health Care Property Investors, Inc. is a $3.6 billion (undepreciated book capital) health care real estate investment trust (REIT) with a well-diversified portfolio of 527 properties in 43 states. The company's largest single operator is Tenet Healthcare Corp., representing 14% of HCP's operating income, followed by American Retirement Corp. at 13%.

More information about Health Care Property Investors, Inc. can be found on the Fitch Ratings web site at www.fitchratings.com.