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I AGREE
04 Jan 2013
Approximately $24.7 Million of Structured Securities Affected
New York, January 04, 2013 -- Moody's Investors Service (Moody's) affirmed the ratings of two
certificates of Sparks Regional Medical Center Lease Certificates of Participation
Series 2002 as follows:
Term certificates due June 15, 2017, Affirmed at B1 (sf);
previously on Mar 31, 2010 Upgraded to B1 (sf)
Term certificates due June 15, 2022, Affirmed at B2 (sf);
previously on Mar 31, 2010 Upgraded to B2 (sf)
RATINGS RATIONALE
The rating of the certificates due June 15, 2017 is affirmed at
B1 (sf) based on the current rating of Health Management Associates,
Inc. (HMA; Corporate Family Rating B1; stable outlook),
which acquired substantially all of the assets of Sparks Regional Medical
Center (Sparks), the original lessee of the facilities supporting
the transaction. The second certificate is rated lower than HMA's
rating because HMA's primary lease term expires prior to the final
payment date of the second certificate and the balloon payment is guaranteed
by a non-rated entity. The rating of this class is affirmed
at B2 (sf).
The principal methodology used in this rating was "Commercial Real
Estate Finance: Moody's Approach to Rating Credit Tenant Lease
Financings" published in November 2011. Please see the Credit
Policy page on www.moodys.com for a copy of this methodology.
There was no model used in the analysis of this transaction.
Moody's ratings are determined by a committee process that considers
both quantitative and qualitative factors.
The rating action is a result of Moody's on-going surveillance
of commercial mortgage backed securities (CMBS) transactions. Moody's
prior full review is summarized in a press release dated February 9,
2012. Please see the ratings tab on the issuer / entity page on
moodys.com for the last rating action and the ratings history.
DEAL PERFORMANCE
As of the January 3, 2013 remittance statement, the transaction's
aggregate Certificate balance was $24.7 million compared
to $37.2 million at securitization. The transaction
currently consists of two Certificates which are due June 15, 2017
and June 15, 2022. The Certificates evidence proportionate
undivided interests in 19 medical facilities which were originally leased
to Sparks. On December 1, 2009, HMA acquired substantially
all of Sparks assets, including the assignment of Sparks' interest
under the lease supporting this transaction. The lease expires
on June 30, 2017, subject to a five-year extension
option.
The scheduled lease payments are sufficient to completely pay off the
Certificate due June 2017. Because there still will be an outstanding
balance for the Certificates due June 2022 at the end of the tenant's
initial lease term, the transaction was structured with a residual
value insurance policy issued by R.V.I. America Insurance
Company (RVI). The policy is for $10,750,000,
which is the principal amount of the Certificates due June 2022.
On February 4, 2009, Moody's downgraded RVI's financial strength
rating to Baa3 from A3 and subsequently withdrew the rating. The
rating on the Certificates due June 2022 is notched down from HMA's rating
due to the size of the loan balance at maturity relative to the value
of the collateral assuming the existing tenant is no longer in occupancy
(the "dark" value).
REGULATORY DISCLOSURES
The Global Scale Credit Ratings on this press release that are issued
by one of Moody's affiliates outside the EU are endorsed by Moody's
Investors Service Ltd., One Canada Square, Canary Wharf,
London E 14 5FA, UK, in accordance with Art.4 paragraph
3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies.
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Dana Baranaskas
Associate Analyst
Structured Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Keith Banhazl
VP - Senior Credit Officer
Structured Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653
Moody's Affirms the Ratings of Two CTL Certificates of Sparks Regional Medical Center Lease, Series 2002
No Related Data.
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