���������ֳ�

���������ֳ� - New York - 22 Aug 2024: ���������ֳ� has placed 18 U.S. Life Plan Communities (LPCs) Under Criteria Observation (UCO), following the publication of ���������ֳ�'s revised 'U.S. Public Finance Not-For-Profit Life Plan Community Rating Criteria' on Aug. 19, 2024.

The ratings placed on UCO will require additional information and analysis to fully assess the effect of the criteria on the ratings. While these ratings may be affected by the criteria changes, not all of the ratings designated as UCO will necessarily change. Placement on the UCO list does not indicate a change in the issuer's underlying credit profile, nor does it affect existing Rating Outlooks or Rating Watch statuses. ���������ֳ� will review all the ratings designated as UCO as soon as practicable, but no later than six months following the date of the criteria release.

SECURITY

Bond security varies by issuance.

KEY RATING DRIVERS

The publication of the revised criteria followed an extensive comment period in which ���������ֳ� received numerous external responses to its exposure draft.

While the foundation of the criteria is intact from its prior version as it pertains to ���������ֳ�'s Key Rating Drivers (KRDs) for an LPC:

--Revenue Defensibility (Market Assessment; Occupancy and Waitlist among considerations);

--Operating Risk (Cost Management; Capital Expenditure Requirements);

--Financial Profile (Cash to Debt, Maximum Annual Debt Service coverage),

���������ֳ� has made some notable changes to the methodology, among them a more nuanced approach to assessing the Revenue Defensibility of an LPC, including the addition of a size/scale sub-assessment and a more specified approach to rating LPCs with more skilled nursing facility (SNF) beds than independent living units (ILUs).

The revised criteria also reflect a more holistic view of the sector risk profile of LPCs, reflected in the limitation of ratings on LPCs at 'A', KRD assessments at 'a', as well as the addition of a 'B' category into the Rating Positioning Table.

���������ֳ� also made a number of clarifying edits in response to market feedback mostly focusing on what constitutes 'high', 'medium' and 'low' probability of project execution under the Capital Plan Risk Matrix; and addressing the potential, albeit unintended, social impact of certain criteria provisions pertaining to an LPC's SNF operations.

RATING SENSITIVITIES

The resolution of the UCO will depend on ���������ֳ�'s evaluation of each issuer's KRD assessments based on the revisions outlined above.

Existing issuer rating sensitivities remain unchanged until the UCO resolution.

CREDIT PROFILE

The U.S. Public Finance Not-For-Profit Life Plan Community Rating Criteria' details ���������ֳ�'s methodology for assigning Issuer Default Ratings (IDRs) and instrument ratings to U.S. not-for-profit LPCs. LPCs offer independent living and at least one additional level of care, such as assisted living or skilled nursing.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

ESG Relevance Scores of each issuer will be reviewed during the UCO resolution. For more information on ���������ֳ�'s ESG Relevance Scores, visit /topics/esg/products#esg-relevance-scores.

Additional information is available on

APPLICABLE MODELS

Numbers in parentheses accompanying applicable model(s) contain hyperlinks to criteria providing description of model(s).

• Portfolio Analysis Model (PAM), v2.0.0 (1)

ADDITIONAL DISCLOSURES

• Solicitation Status
• Endorsement Policy

ENDORSEMENT STATUS