Meditrust, the nation's largest healthcare real estate investment trust with $1.6 billion in assets, has climbed into investment-grade territory. Citing the REIT's track record, conservative underwriting standards and improved financial flexibility, Moody's Investors Service, New York, raised Meditrust's long-term senior debt rating to Baa3 from Ba2. Last month, the Needham Heights, Mass.-based REIT raised $250.4 million in net proceeds from an equity offering, which company officials believe to be the single largest offering by a REIT. The 8.75 million newly issued shares were priced at $30.13 per share. Meditrust is using the proceeds to repay debt and invest in additional healthcare facilities. During the first three months of 1995, the REIT completed $117 million in real estate investments. They consisted of $105 million of new financing for five long-term-care facilities, two retirement living centers and an acute-care hospital, and $12 million in ongoing development funding for long-term-care facilities and medical office buildings.
Standard & Poor's Corp. has lowered the BBB investment-grade rating of Harding Hospital, a 79-bed psychiatric facility in Worthington, Ohio, to a speculative rating of B. The downgrade reflects long-term operating losses, a weakening cash position and significant business risks associated with its inpatient psychiatric specialty, the New York-based credit-rating agency said. It affects $6.8 million in debt. The rating agency also lowered to BB from BBB- its bond rating on 103-bed Jackson County Memorial Hospital in Altus, Okla., because of the hospital's deteriorating financial position and failure to reach financial projections. The downgrade affects $30.2 million in debt. In addition, the "underlying rating" on $143.5 million in debt held by 700-bed Swedish Medical Center in Seattle was lowered to A- from A+ because of recurring losses, sharp volume declines and management turnover. The underlying rating reflects what the credit risk would be without credit enhancement. Meanwhile, Standard & Poor's raised its rating on 149-bed Grace Hospital in Morganton, N.C., to A from A-. The rating, which affects $22.1 million in debt, reflects improved earnings and cash flow and a strengthened balance sheet.
Northstar Health Services, a Pittsburgh-based provider of outpatient rehabilitation, has filed a registration statement with the Securities and Exchange Commission for the sale of 1.75 million shares of common stock. The offering's co-managing underwriters are Commonwealth Associates, New York, and Pennsylvania Merchant Group, Radnor, Pa. Since its inception in 1991, the company has grown through acquisitions. As of Dec. 31, 1994, Northstar operated 17 outpatient rehabilitation clinics and had 80 contracts to provide services, primarily at long-term-care facilities, all in Pennsylvania. It is believed the proceeds from this offering will be used for additional acquisitions. The company's stock is traded on the NASDAQ exchange.
ValueMark Behavioral Healthcare Centers, Atlanta, has completed the purchase of seven psychiatric facilities from Tenet Healthcare Corp., Santa Monica, Calif. The facilities are Brawner Mental Health System, which includes facilities in Smyrna, Ga., and Stockbridge, Ga.; Psychiatric Institute of Richmond (Va.); Pine Grove Hospital and Mental Health Center, Canoga Park, Calif.; North Hills Hospital of Kansas City (Mo.); and Laurel Oaks Hospital and Laurel Oaks Residential Treatment Center, Orlando, Fla. Financial terms weren't disclosed.