Fitch Ratings dropped a Lee’s Summit Industrial Development Authority issue for John Knox Village to BBB-­minus — the last rung of investment-grade — due to ongoing fiscal strains.

The action affects $55.4 million of revenue refunding bonds sold in 2007 for the continuing care retirement community. The outlook was revised to stable from negative.

John Knox Village’s debt burden is modest, according to analysts. But declining net entrance fee receipts and lower investment income have hurt its maximum annual debt service coverage ratio, lowering it 1.47 times in fiscal 2010.

In its favor, the CCRC’s net operating margin improved over the last three years from 3.9% in fiscal 2008 to 5.6% in fiscal 2009 and to 6.6% in fiscal 2010.

The bonds are secured by a security interest in unrestricted gross receivables, a first-mortgage lien on an 11.6 acre parcel that includes the care center, and a fully funded debt-service fund.

John Knox Village is a located in Lee’s Summit, Mo., with more than 1,500 assisted living units and skilled nursing beds. It had total revenue of $63.6 million in fiscal 2010.

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