Glendale-based senior and affordable housing nonprofit Front Porch Communities and Services has received strong financial ratings from two credit rating agencies.
Both Fitch Ratings and Standard and Poor last month gave the large senior housing organization A ratings with a stable outlook, as well as an A- rating on bonds issued on behalf of Front Porch.
The high marks come two years after Front Porch’s merger with fellow California-based senior housing network Covia closed, expanding its portfolio reach to become one of the largest nonprofit senior living providers in the country. The company now houses more than 7,500 residents and operates 61 communities.
Both agencies said the company’s economy of scale could yield greater operational efficiency.
“We were very transparent with the analysts about what we are up to, emphasizing elements of our strategic planning work that require us to continue to invest in the creation of this ‘new’ Front Porch,” said Sean Kelly, the company’s chief executive.
The agencies’ ratings referred to the combined $405 million in California Statewide Communities Development Authority Revenue Bonds issued to Front Porch over the past two years. These tax-free debt securities refinanced existing bonds Front Porch had prior to its merger with Covia and allowed for the company to refund outstanding variable-rate debt to a long-term fixed interest rate.
With high occupancy rates noted in both financial ratings, Front Porch has a healthy revenue flow as the aging-services industry faces headwinds. The company’s high occupancy rates and patient-service participation stand out as many in the sector struggle with labor shortages and low Medicaid reimbursement rates.