American Eagle Delaware Holding Co. LLC, MI 2018A-1, A-2 Senior-Living Revenue Bond Rating Lowered To 'BBB(sf)'

NEW YORK (S&P Global Ratings) Dec. 7, 2018--S&P Global Ratings lowered to 
'BBB(sf)' from 'BBB+(sf)' its rating on Capital Trust Agency, Fla.'s series 
2018A-1 and 2018A-2 senior-living revenue bonds and affirmed its 'BBB-(sf)' 
rating on the agency's second-tier series 2018B senior-living revenue bonds, 
both of which were issued for the acquisition of American Eagle Delaware 
Holding Co. LLC, Mich.'s Brookdale portfolio. The outlook is stable.

"The lower initial rating is the result of final bond pricing which increased 
maximum annual debt service (MADS) by over $700,000 and materially lowered the 
debt service coverage (DSC) levels," said S&P Global Ratings credit analyst 
Richard Kubanik. The agency's unrated third-tier series 2018C senior-living 
revenue bonds (that we did not rate) demonstrate DSC below 1x. There is also a 
$10 million subordinated seller's note.

Officials intend to use series 2018A-1, 2018A-2, and 2018B bond proceeds to:
  • Finance the acquisition of 18 senior-living communities,
  • Pay capital expenses and other start-up costs,
  • Fund certain reserve funds, and
  • Pay issuance costs.
The bonds will finance the acquisition of 18 senior-living communities, 
totaling 1,292 total units--assisted living (56%), independent living (28%), 
and memory care (16%)--from Brookdale Senior Living Inc., the largest operator 
of senior-living communities in the U.S. based on total capacity to American 

For more information, please see the full analysis on American Eagle, 
published Oct. 24, 2018, on RatingsDirect.

"The stable outlook reflects our opinion of American Eagle's governance 
structure, Greenbrier's management record with senior-living facilities, 
average project asset quality, and adequate reserve and replacement levels, 
coupled with the demand profile of the local markets where the properties have 
a 9% discount," added Mr. Kubanik.
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