Fitch rates HCP notes BBB+

Fitch Ratings said it assigned a BBB+ rating to HCP, Inc.'s $350 million 4.2% senior notes due 2024.

The notes were priced at 99.54% of par to yield 4.257%, a 148 basis points spread to the benchmark Treasury, Fitch said.

The proceeds are expected to be used to repay the amounts outstanding under the company's line of credit which, along with cash on hand, repaid $400 million of 2.7% notes due February 2014 and a $156 million 5.7% mortgage due February 2014.

HCP also has an issuer default rating of BBB+, unsecured bank credit facility rating of BBB+, unsecured term loan rating of BBB+ and senior unsecured notes rating of BBB+.

The outlook is stable.

The ratings reflect HCP's steady and predictable cash flows from a large portfolio of high-quality properties across the health care real estate spectrum, maintenance of leverage and fixed-charge coverage metrics appropriate for the rating category, manageable lease expiration and debt-maturity schedules, financial flexibility stemming from a large unencumbered pool to support unsecured borrowings and a solid liquidity position, Fitch said.

Credit concerns include operator and geographic concentration, the impact of government fiscal imbalance and regulatory risk on operators' profitability, the agency said, and weak coverage for its largest tenant.

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