Fitch Ratings said it has upgraded to BBB from BBB-minus the rating on $71.3 million Hawaii Department of Budget & Finance series 2012 revenue bonds issued on behalf of Kahala Nui (Kahala).
The rating outlook is revised to stable from positive.
The upgrade to BBB reflects a continuation of Kahala's improving operating performance and resultant debt moderation. Kahala's operating ratio was 94.9 for fiscal 2013, well improved from a high 116 in 2008 and below Fitch's BBB category median of 97.2.
Increased independent living unit turnover produced over $12 million in net entrance fees, versus $3.7 million in 2012. Kahala's net operating margin-adjusted is expected to remain at or above Fitch's BBB median via consistent unit turnover and steady occupancy.
