Kendal at Hanover’s ‘BBB+’ credit rating affirmed by Fitch

Kendal at Hanover campus buildings

Hanover, New Hampshire—Fitch Ratings has affirmed Kendal at Hanover’s long-term “BBB+” credit rating with stable outlook. Strong credit ratings are key to obtaining financing at low interest rates.

In an Aug. 21 news release, Fitch stated that Kendal at Hanover’s strong market position “is supported by limited direct competition (KaH is the only Type ‘A’ life plan community in its primary service area), entrance fees that are comparable to local real estate values, and its relationships with Dartmouth College and Dartmouth-Hitchcock Medical Center. These relationships enable KaH to offer additional amenities to its residents, including an on-campus medical clinic staffed by medical professionals from the Dartmouth-Hitchcock Medical Center.”

Fitch reported that Kendal at Hanover has a steady operating profile “characterized high occupancy, with independent living (IL) occupancy at 97% at YE 2019 and 98% at the end of the first quarter of fiscal 2020, strong cash flow, good unrestricted liquidity and median level debt service coverage.” Fitch notes that Kendal at Hanover “has not experienced any incidents of coronavirus among its residents or employees, and despite the lockdown, which did not allow residents to move onto the campus, KaH has received entrance fees from six new residents since the end of March 2020.”

“We’re extremely pleased that Fitch’s financial analysts once again have issued a BBB+ stable rating to our organization,” said Brent Edgerton, Kendal at Hanover’s Associate Executive Director/Chief Financial Officer. “The rating is a good indicator of our financial strength despite the economic environment and challenges that the global pandemic has placed on our economy.  A strong credit profile helps Kendal at Hanover maintain its high standards of care, allowing us to continue to offer excellent service to our residents and be a vital business partner in the community.”

The BBB+ credit rating affirmation also reflects Fitch’s positive opinion of:

  • Phase II of Kendal at Hanover’s master facilities plan, which includes construction of a new assisted living building and renovation of the existing assisted living space. “[T]he transition of AL and memory care to the neighborhood model, which has increasingly become the current standard of care in the sector, should further solidify KaH’s market position.”
  • Expectations that Kendal at Hanover will see operating performance return to historical performance after the effects of coronavirus subside.
  • Kendal at Hanover’s relationship with Kendal, which “provides assistance and guidance in the areas of finance, purchasing, marketing and human resources, as well as a recognizable brand name.”