Omega Healthcare Investors Inc.

S&P Global Ratings' stable outlook on Omega reflects our expectation that continued steady increases in Medicare Advantage enrollees are largely offset by increased census due to an increasingly older population and slight benefits accrued from the shift to a patient-driven payment model, which rewards patient outcomes over volumes. Moreover, despite COVID-19's pressure on occupancy levels, we think the robust government support will more than offset any cash flow declines at the operator level, boosting EBITDAR coverage modestly. As a result, we anticipate Omega will continue to generate stable cash flows from its portfolio of triple-net leased properties. We project Omega's key credit metrics will remain relatively unchanged over the next 12-18 months, with adjusted debt to EBITDA in the mid-5x

...Omega Healthcare Investors Inc. is the largest pure-play skilled nursing facility (SNF)-focused health care REIT, with a well-diversified portfolio by geography and operator. As of June, 30, 2020, Omega had gross investments of approximately $10.4 billion and was well-diversified across 40 states and the U.K. Moreover, Omega's tenant base consists of 69 operators with only one tenant, Ciena, accounting for more than 10% of revenues (10.2%). Despite near-term COVID-19-related headwinds, the company has posted solid rent collections and we expect this trend to continue. Omega collected over 99% of contractual rent and mortgage payments for the second quarter of 2020 as well as for the month of July (when excluding Daybreak, which is transitioning its portfolio pursuant to a forbearance agreement). Given the company's relatively long-term triple-net leases and minimal near-term expirations coupled with the financial support provided to operators through the government's CARES Act, we expect...

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