Omega Healthcare Investors Inc.

Overview Key strengths Key risks The company has demonstrated an ability to re-tenant or recycle struggling assets with limited impact to long-term cash flow. The impact of COVID-19 has left several operators unable to pay rent and has stressed coverage levels throughout the portfolio. Triple-net leases with minimal expirations over the next few years provides cash flow stability. A tight labor market is driving wage increases, limiting admissions, and further pressuring operator coverage levels, though pressure is showing signs of starting to ease. Relatively conservative balance sheet and well-laddered debt maturity profile with modest near-term maturities. High exposure to skilled nursing facilities (SNFs), which are more exposed to government reimbursement risk than other health care facility types, though SNFs benefited

...Operator coverage levels have been pressured with several operators unable to pay rent, though the company has shown the ability to navigate such situations with minimal impact to long-term cash flow. Operator earnings before interest, taxes, depreciation, amortization, and rent expense (EBITDAR) coverage for the 12 months ended March 31, 2022, was 1.10x across Omega's portfolio, a material decline from 1.44x a year prior. While government support has helped some operators stay afloat, the cumulative effect of the pandemic and labor pressures have stressed SNF operators. The company generated 32.9% of rent (across 25 operators) from...

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