...With this fixed-rate new issue, Diakon Lutheran Social Ministries (Diakon) significantly decreases the risks associated with its variable-rate debt profile. Specifically, this fixed-rate refunding takes out the debt backed by Wachovia Bank, N.A. letters of credit, due to expire in September 2010, which was a main credit driver of the Rating Outlook change to Negative from Stable on Sept. 16, 2009. Diakon's weakened liquidity, resulting from an overall decline in its investment portfolio, limits its debt capacity and increases its overall credit risk, especially relative to its debt mix. Anticipated declines in profitability materialized as a result of acquisition and repositioning costs over the past two years. Through the interim period ended Aug. 31, 2009, profitability rebounded in response to actions of management and is expected to continue to improve over the medium term as projects are completed. Diakon's planned future capital spending associated with committed repositioning projects...
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