S&P Global Ratings placed Toledo, Ohio-based ProMedica's "A+" rated debt on CreditWatch with negative implications after the hospital operator announced it would acquire a nursing home chain.
On April 25, ProMedica and Welltower, a healthcare-focused real estate investor, purchased Quality Care Properties, which is the soon-to-be owner of Toledo-based HCR ManorCare, the nation's second-largest nursing home chain. Under the agreement, Welltower will acquire all of the outstanding shares of QCP and ProMedica will take over and operate HCR ManorCare.
"The CreditWatch placement reflects our view of the potential for significant additional debt and cash requirements required to fund its announced acquisition of HCR ManorCare," said S&P Global Ratings credit analyst Anne Cosgrove, adding that the acquisition poses risks associated with the expansion into a new business.