Fitch Ratings last week affirmed St. Louis-based Lutheran Senior Services’ A-minus rating but warned of the possibility of a future downgrade of the system.
The review came ahead of the continuing care retirement community’s sale of $38.7 million of bonds slated for this week through the Missouri Health and Educational Facilities Authority.
The fixed-rate sale will finance various capital projects throughout the LSS system.
The affirmation and change to a negative outlook from stable also affects $58.4 million of 2007 bonds, $46 million of 2006 bonds, $49.7 million of 2005 bonds, and $21.2 million of 2004 bonds.
“The negative outlook reflects the potential increase in Lutheran Senior Services’ already-elevated debt burden,” analysts wrote.
The CCRC also faces liquidity renewal risks tied to $95.9 million of variable-rate bonds.
LSS plans to borrow an additional $50 million next year to fund construction of new independent-living units at one of its facilities.
It operates nine continuing-care retirement communities in Illinois and Missouri.
