Omega Announces Senior Unsecured Debt and Preferred Stock Rating Upgrades by Moody's

Business Wire, Jan 25, 2006

TIMONIUM, Md. -- Omega Healthcare Investors, Inc. (NYSE:OHI) today announced rating upgrades by Moody's Investors Service to the Company's senior unsecured debt and preferred stock on Friday, January 20, 2006. The Company's senior unsecured debt was upgraded to Ba3 and the Company's preferred stock rating was upgraded to B2. The Company's outlook was rated as 'Stable.' Below is the full text of Moody's release announcing the Company's upgrades.

MOODY'S RAISES RATING OF OMEGA HEALTHCARE
                 (SENIOR DEBT TO Ba3); STABLE OUTLOOK

    Approximately $600 Million of Securities Affected.

    New York, January 20, 2006 -- Moody's Investors Service raised the
    ratings of Omega Healthcare Investors, Inc. (senior unsecured debt
    to Ba3, from B1). The rating outlook is stable. According to
    Moody's, this rating action reflects Omega's increased size and
    improvement in asset quality and performance. The rating agency
    also notes that Omega has adequate liquidity with no near-term
    debt maturities, a modest dividend payout and a mostly
    unencumbered asset base.

    Moody's is encouraged by the significant progress that Omega
    continues to make in executing its strategic plan, solidifying its
    financial flexibility, and repositioning its healthcare
    properties. The REIT's new investment activities (roughly $200
    million net in 2005), sale of non-core healthcare properties, and
    repositioning of existing assets has improved the quality of
    Omega's property portfolio, and property-level rent coverages have
    continued to rise. Moreover, the REIT's growth has been well
    financed, earmarked by its consistent issuance of common equity.
    Moody's also notes that as a result of Omega's recent tender for
    its 2007 senior unsecured bonds, the REIT has no debt maturities,
    excluding its secured credit line, until 2014. Omega's low levels
    of secured debt (8% of gross assets at 3Q05) and increased fixed
    charge coverage (2.16x for 9M05) provide further support for the
    rating upgrade. These credit strengths are counterbalanced by
    Omega's property type concentration in skilled nursing facilities
    (about 95% of total revenues),which is a segment of the healthcare
    market heavily reliant on government reimbursement, and subject to
    material volatility. Though Moody's believes that the outlook for
    government reimbursement is stable through 2006, the longer term
    outlook is uncertain given the level of state and federal budget
    deficits.

    Given Omega's property-type concentration in skilled nursing
    facilities, in order to achieve a rating upgrade to Ba2 the REIT
    would need to increase its property portfolio size to above $1.5
    billion in gross assets, achieve fixed charge coverage above 2.5x,
    while maintaining leverage in the mid-50% range and secured debt
    at less than 10% of assets. Alternatively, establishing size in a
    second property type that contributes at least 25% to Omega's
    revenues, and reducing operator concentration so that the top five
    operators contribute less than 50% of total revenue, would also
    likely lead to a rating upgrade. A rating downgrade would most
    likely result from operator problems or adverse shifts in
    government healthcare reimbursements resulting in fixed charge
    coverage below 1.9x.

    The following ratings were raised with a stable outlook:

    Omega Healthcare Investors, Inc. -- Senior unsecured debt to Ba3,
    from B1; senior debt shelf to (P)Ba3, from (P)B1; preferred stock
    to B2, from B3; preferred stock shelf to (P)B2, from (P)B3.

    Omega Healthcare Investors, Inc. (NYSE:OHI) headquartered in
    Timonium, Maryland, USA, is a real estate investment trust (REIT)
    investing in and providing financing to the long-term healthcare
    industry -- predominately skilled nursing facilities (SNF). At
    September 30, 2005, the REIT owned or held mortgages on 216 SNFs
    (95% of revenue) and assisted living facilities (3% of revenue)
    with approximately 22,407 beds located in 28 states, and operated
    by 38 third-party healthcare companies.

                                  end

The Company is a real estate investment trust investing in and providing financing to the long-term care industry. At December 31, 2005, the Company owned or held mortgages on 227 SNFs and ALFs with approximately 24,476 beds located in 27 states and operated by 35 third-party healthcare operating companies.

This announcement includes forward-looking statements. All forward-looking statements included herein are based on current expectations and speak only as of the date of such statements. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of future events, new information or otherwise. Such forward-looking statements should be regarded solely as reflections of the Company's current operating plans and estimates. Statements regarding future events and developments and the Company's future performance, as well as management's expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, the Private Securities Litigation Reform Act of 1995 or in releases by the Securities and Exchange Commission, all of which may be amended from time to time. All forward-looking statements are subject to certain risks and uncertainties that could cause actual events to differ materially from those projected. Management believes that these forward-looking statements are reasonable; however, you should not place undue reliance on such statements. Actual results may differ materially from those reflected in such forward-looking statements as a result of a variety of factors, including, among other things: (i) uncertainties relating to the business operations of the operators of the Company's properties, including those relating to reimbursement by third-party payors, regulatory matters and occupancy levels; (ii) regulatory and other changes in the healthcare sector, including without limitation, changes in Medicare reimbursement; (iii) changes in the financial position of the Company's operators; (iv) the ability of operators in bankruptcy to reject unexpired lease obligations, modify the terms of the Company's mortgages, and impede the ability of the Company to collect unpaid rent or interest during the pendency of a bankruptcy proceeding and retain security deposits for the debtor's obligations; (v) the availability and cost of capital; (vi) competition in the financing of healthcare facilities; and (vii) other factors identified in the Company's filings with the Securities and Exchange Commission.