Vous êtes sur la page 1sur 8


European Health Care Corporate Securitizations

Undergoing Structural Change
Publication date: 24-Jan-2006
Primary Credit Analysts: Adele Archer, London (44) 20-7176-3527;
Michela Bariletti, London (44) 20-7176-3804;
Stuart Nelson, London (44) 20-7176-3621;
Secondary Credit Analysts: Robert Robinson, London (44) 20-7176-3824;
Liesl Saldanha, London (44) 20-7176-3571;

The European health care securitization sector was one of most active for restructuring activity in 2005
and this is expected to continue into 2006. Ongoing underlying cash flow growth is likely to fuel further
debt issuance, including value taps, as well as further consolidation (particularly in the fragmented care
homes sector), strategic disposals, and ownership changes.
The sector is substantially controlled by venture-capital sponsors seeking to reap investment returns,
while new investors seek investment opportunities, attracted by the growth prospects for the sector. We
maintain ratings in nine transactions — totaling approximately £2.56 billion of rated debt — incorporating
the acute care, psychiatric care, and care homes sectors. With one exception (Craegmoor Funding No.2
Ltd.), rating trends were either stable or positive over 2005. All transactions are U.K. based.

Strategic Disposals
Over the past year, the ultimate parents in the two rated transactions in the U.K. private acute care sector,
GHG Finance Ltd. and UK Hospitals No. 1 S.A., both undertook strategic disposals to reposition their
businesses and/or monetize rising asset values.
In July 2005, the primary participant in the UK Hospitals No. 1 transaction, British United Provident Assoc.
Ltd. (BUPA), sold nine weaker, non-core hospitals for approximately £85 million. Sale proceeds, plus
existing retained cash, were used to repay all £120 million of outstanding floating-rate notes at the
October 2005 interest payment date. The ratings were affirmed, as the prepayment of debt more than
offset the loss of EBITDA (for further information please refer to table 1).
We also affirmed the ratings on GHG Finance's notes in July 2005, following the disposal of BMI Health
Services Ltd., which involved outsourced occupational health care and screening contracts. The business
had a limited impact on the group's activities and was generating minor EBITDA and cash flow losses.
The ratings in the transaction had previously been affirmed in April 2005 following the group's disposal of
its Partnerships in Care unit (for further information please refer to table 1). Although this action was
considered negative for the overall credit profile of the transaction, we were able to affirm the ratings
because we were still comfortable that the alignment of interests between noteholders and equity was
maintained. The affirmation was principally due to both the transaction benefiting from a high level of
funded equity at the outset and to the increased sustainable value in the remaining acute business, which
had achieved substantial growth since closing in 2001.
A further mitigating feature of the disposal actions by both GHG Finance and UK Hospitals No. 1 was that
both transactions were materially deleveraged: floating-rate notes were repurchased, as in other
refinancing actions, because this is less costly in the current interest rate environment.
In affirming the ratings on GHG Finance's notes, we maintained that it is possible for proposed changes

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
www.standardandpoors.com/ratingsdirect Page 1 of 8
489219 | 300253543
to a transaction to modify its creditworthiness but for the ratings to remain unchanged. This depends on
the ratings assigned at the outset, or may be due to the negative consequences affecting investors in a
way that the ratings do not address. The rating scale introduces thresholds to what is a continuous
spectrum of risk, so between thresholds there are situations where the risk level can increase or decrease
without warranting a rating change. Further details on this topic are provided in "Rating Affirmations And
Their Impact On Investors" (see "Related Articles").

First Market Value Transaction

One of the latest developments in the corporate securitization market has been the evolution and growing
acceptance of market value-based financing structures secured on property assets. The most recent
example is the groundbreaking hybrid Talisman-2 (Priory) Finance PLC transaction completed in
December 2005 involving health care facilities in Europe (see table 3). It used a blend of market
value-based real estate finance and corporate securitization analysis to achieve a high proportion of 'AAA'
rated notes without the benefit of explicit third-party support. The transaction was backed by a single loan
and leases to a single tenant, the Priory Group.
The £375 million transaction, containing tranches rated 'AAA' (50% of the rated notes), 'AA', 'A', and
'BBB', was Priory's second securitization, following its 2003 issue of £207.5 million of secured fixed- and
floating-rate notes, of which £196.0 million were rated investment grade. The debt associated with the
earlier transaction was fully redeemed in September 2005 following the acquisition of the group by ABN
AMRO Bank N.V. (AA-/Stable/A-1+) in July 2005.
The new transaction partially refinanced the £875 million purchase price. This represented 16x EBITDA
based on the run rate through 2005 on the full maturation of the existing 44 hospitals and schools in
Priory's property portfolio. Notable features include the fact that repayment of all note classes relies on
the sustainable market value of the property assets at debt maturity. Debt repayment is expected to be
accomplished via a refinancing or sale of the properties in 2012. This is a much shorter period than most
corporate securitizations, where typical maturities are 20-30 years with full amortization within the term
and no refinancing risk. In this case, the rated notes are to be paid as a 100% bullet.
Contracted rental payments by the tenant are the sole source of scheduled income servicing the interest
on the rated debt. The affordability of the rent was based on a look-through to the tenant's stressed cash
flows – earnings before interest, taxes, depreciation, amortization, and rents (EBITDAR) – under various
rating scenarios. Mitigating features include relatively conservative leverage (based on our LTV ratio of
68% for investment-grade rated debt), the legal separation of the real estate assets from the operating
assets, and the relatively short term of the transaction, with a three-year tail period until 2015 for the sale
or refinancing to be accomplished in an orderly fashion. In common with other real estate finance-style
financings, operational covenants in the transaction are reduced in comparison with traditional corporate
securitizations, enhancing operational flexibility, but some key features have been retained. These include
tenant-level covenants (within the lease guarantee) that trap excess cash for debt service unless
EBITDAR to rent is greater than 2:1. There is also a covenanted requirement on the tenant to provide us
with periodic financial reports and access to management as needed.
Following this market precedent, we consider that further property-based transactions involving
specialized health care assets may be possible. There are, however, likely to be significant differences
from conventional real estate financings (office buildings, for example). Key factors for consideration are
likely to be:
• A lower proportion of higher rated ('AAA' or 'AA') debt;
• Generally lower leverage and more conservative LTV ratios than may be achievable through
typical corporate securitization transactions;
• Demonstrated market liquidity of the asset class underpinned by an assessment that the assets
would always be in use;
• Strong rental covers that take into account the tenant's investment requirements to support a
stable EBITDAR; and
• Enhanced visibility of tenant performance through reporting and restrictions on excess cash
release when underperformance occurs.

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
Standard & Poor’s | RatingsDirect Page 2 of 8
489219 | 300253543
Strong Transaction Performance
We will continue to monitor changes in the strategy of the U.K.'s National Health Service (NHS) to make
greater use of private sector acute care providers, which may result in increased risk to rated private
sector health care operators, including price and margin erosion. The top-tier rated acute care hospital
operators have maintained good underlying cash flow growth, despite higher business risks and the
impact of strategic disposals undertaken in 2005. Strategies with respect to increased partnering with the
NHS are evolving cautiously.
In the fragmented U.K. nursing home sector, we expect there to be further consolidation and ownership
changes, which should facilitate increasing operator efficiency and profitability. The increasing elderly
population and currently stable industry environment — with constrained supply and rising bed rates —
are attracting increased transaction activity, principally from venture-capital sponsors. Businesses are
being purchased at high earnings multiples (well over 10x current EBITDA). Although our present view of
the prospects for U.K. care homes is generally favorable, we expect that bed rates will grow more slowly
than in recent years, while further gains in occupancy will also moderate. We note that there has been
cyclicality in supply and performance in the sector in the past, and consider that this could recur. Falls in
occupancy and slower fee growth, together with staff costs, are key factors that determine industry
performance and profitability. Even if revenue growth remains robust, operators will continue to face the
challenge of managing high fixed staff costs. Although wage levels and inflation for care homes staff are
relatively low, high staff turnover rates, ongoing training requirements, and the use of agency staff where
there are labor shortages can drive up costs faster than revenue increases, potentially affecting operators'
Transaction performance in the care homes sector has been stable to positive. The majority of ratings
were affirmed in 2005, with two exceptions. The underlying ratings on the class A notes in the Craegmoor
Funding No.2 transaction were placed on CreditWatch with negative implications in October 2005, which
reflected continued underperformance (see table 1). Also in October 2005, the ratings on the junior notes
in the Care Homes No. 2 and Care Homes No. 3 Ltd. transactions were raised to 'BBB+' from 'BBB',
reflecting overperformance.
Overall, the care homes transactions we rate reflect the capacity of nursing home operators to pay rents,
which provide the sole source of income for servicing the notes. Since these real estate-based
transactions closed, the business model underlying the structures has changed, with an increasing shift
from a diverse pool of tenants to an owner-operator model as defaulting tenants were acquired by the real
estate owners. The transition has led to transactions being increasingly exposed to the owner-operators'
business risks. These risks have been offset by the benefits of consolidation, which has placed the assets
in the hands of more creditworthy and efficient tenant-operators. This, along with improved industry
fundamentals, has contributed to the relative overperformance of the real estate-based transactions since
the stress period of 2001-2002. Our view is that these transactions now require additional cushion due to
their increased exposure to operator risk, which limits further upgrade potential at this time.
Although the health care sector continues to benefit from higher growth potential than many other
securitization sectors over the three to five year visible time horizon, there is a significant degree of
operating leverage and management intensity in this sector. These factors generally manifest themselves
in more conservative structures than seen in more mature or less operating-intensive securitizations.
Total debt as a multiple of starting EBITDA, for example, has ranged between 4x and 6x, while LTV ratios
on recent transactions, excluding the Care Homes transactions, have generally been between 65% and
80%. In addition, risk capital and equity have tended to be higher, at between 12% and 30% of
sustainable value. Margin stresses in the early years of a transaction test its ability withstand up to a 50%
decline in margin. Restricted payment tests for the release of dividends may continue to be set at higher
thresholds, ranging between 1.3x and 1.7x free cash flows after minimum maintenance capital
expenditure and taxes in current transactions.

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
www.standardandpoors.com/ratingsdirect Page 3 of 8
489219 | 300253543
Table 1

Details Of European Health Care Securitizations

Primary Credit ratings on all Date of initial
participant[s] rated classes* issuance Analyst[s] Description

Care Homes No. 2 Ltd.

NHP PLC AAA; A; BBB+ May 27, 1999 Michela Bariletti; This transaction is backed by a
Adele Archer portfolio of nursing home property
assets owned by NHP PLC.
The ratings on the notes reflect the revenue-generating capacity of the operators' real estate. Performance continues to stabilize, with
occupancy of 92% in line with the industry average, interest coverage of 2.8x, and rental coverage (the measure of overall operator
profitability) relatively stable at 1.6x. The acquisition of NHP by The Blackstone Group in 2004, together with the assumed control by
Blackstone-owned Southern Cross of NHP's subsidiary Highfield Care, has further increased operating exposure risk, although we
consider that this has been offset to date by the strength and operating efficiencies of the combined entity. Future corporate activity
remains a key risk in this transaction, although we still do not expect any rating activity as a result of a change in ownership structure in
the near term.

Care Homes No. 3 Ltd.

NHP PLC AAA; A; BBB+ Nov. 18, 1999 Michela Bariletti; This is also a securitization
Adele Archer backed by a portfolio of nursing
home property assets owned by
Driven by the same credit metrics as the Care Homes No. 2 transaction, performance has also proved stable in terms of both occupancy
and coverage, continuing to benefit from the effect of a switch to RPI-based lease reviews, as well as from increasing local authority fee
levels and NHS contributions for nursing home operators. Occupancy is currently 91%, interest coverage 2.9x, and rental coverage 1.7x.

Craegmoor Funding (No.2) Ltd.

Craegmoor Group Ltd. AAA; A-(SPUR)/Watch Neg July 17, 2003 Adele Archer; This transaction is backed by the
Michela Bariletti cash flows generated by
operating subsidiaries of
Craegmoor Group Ltd.
The underlying 'A-' credit ratings on the notes remain on CreditWatch with negative implications where they were placed on Oct. 10,
2005, reflecting the continued underperformance of the borrowing group's operations and free cash flows (FCF) and increased
uncertainty regarding medium-term recovery prospects. Following publication of the most recent quarterly report for the year to Sept. 30,
2005, Craegmoor reported a further deterioration in revenues and FCF, down 1% and 3%, respectively, against the 12-month period
ended June 20, 2005. This poor result caused the debt service coverage ratio (DSCR) for the 12-month period to Sept. 30, 2005 to
decline to 1.20x for all debt — which is only just above the net FCF-to-total debt service financial covenant — and to 1.79x for 'A' rated
debt. The trigger of the financial covenant would not in itself lead to an automatic lowering of the class A notes at this stage, but it would
permit the trustee and MBIA Assurance S.A. as the note-controlling party to step in and appoint an administrative receiver at the
borrower level in order to manage the business, while the transaction additionally allows for a "cure period", during which time equity
sponsors have the option to inject cash into the transaction to cure the breach. We note that the continuation of subpar performance has
resulted in a complete change in the company's management team in recent months. These management changes contribute to the
increased uncertainty surrounding Craegmoor's future business strategy and the transaction's performance. We will closely monitor the
new management team's turnaround strategy for improved performance over the near term. In addition, we will explore the potential
ability or willingness of the sponsor, Legal & General Ventures Ltd., to provide financial support. To the extent that the business
prospects of the company have been adversely affected and/or additional financial support by the sponsors is not forthcoming if needed,
we will assess future performance by applying a higher haircut to projected future cash flows, which could result in a downgrade of the
class A notes.

GHG Finance Ltd.

General Healthcare AAA; A; BBB Aug. 9, 2001 Adele Archer; This transaction is backed by the
Group Ltd. (GHG) Michela Bariletti operating cash flows of much of
the business of GHG, the U.K.'s
largest private hospital group.
In July 2005, GHG sold the loss-making BMI Health Services business. This move was considered neutral for the credit of the
transaction, for which the overall outlook remains stable. The ratings had previously been affirmed in April 2005 following the group's
disposal of its Partnerships in Care unit in March 2005. Although the disposal resulted in some loss of business diversity and cash
generation, this was offset by a partial reduction in leverage. Prepayment covered £260 million of floating-rate debt, or 140% of the
allocated debt amount compared with a 32% loss of cash flows. Pro forma for the disposal, total debt to EBITDA reduced to 4.4x from
5.1x and DSCRs have improved. A further mitigant was the implementation of a new cash-trapping mechanism offsetting the reduced
cash flow coverage for fixed-rate debt in the latter years of the transaction. The balance of the £552 million sale proceeds, net of costs,
was used to pay the sponsors a special dividend, constituting a value strip, and to redeem the 'BB' rated debt fully ahead of more senior
classes. The sale was subject to a rating confirmation test because it was outside the usual scope for disposals, with a material impact
on future business diversity and debt-servicing capacity. In the year to Sept. 30, 2005, GHG's total EBITDA fell by 7% reflecting the sale
of its Partnerships in Care unit in, while its total DSCRs strengthened to 2.11x on an EBITDA basis and 1.74x based on FCF.

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
Standard & Poor’s | RatingsDirect Page 4 of 8
489219 | 300253543
Table 1

Details Of European Health Care Securitizations (cont.)

Talisman-2 (Priory) Finance PLC

The Priory Group AAA; AA; A; BBB Dec. 23, 2005 Stuart Nelson; This transaction is backed by the
Adele Archer property assets of the Priory
Group which provides a variety of
mental health care services in the
This transaction is the first hybrid real estate finance/corporate securitization of specialist health care properties rented to a single tenant
(the Priory Group) to achieve a 'AAA' rating without explicit third-party support. The transaction partially refinanced the £875 million
acquisition price paid by ABN AMRO Bank, which acquired the business in June 2005. All rated debt is due as a 100% bullet in 2012,
with a three-year tail to refinance or sell the properties. The transaction benefits from reduced business risk because the tenant's
operating assets are legally separated from the issuer and financing costs are lower. The tenant benefits from greater operational
flexibility through a reduced suite of covenants. Trade-offs include lower overall leverage, greater constraints on the tenant's ability to
distribute excess cash, and tenant reporting requirements that are considered key to performance monitoring of the transaction. Rated
debt from the previous corporate securitization undertaken by Priory Finance Co. Ltd. was fully redeemed at the Sept. 15, 2005 interest
payment date.

PHF Securities No. 1 Ltd. (PHF 1)

Principal Healthcare AAA; BBB March 12, 1997 Michela Bariletti; This securitization is backed by a
Finance (U.K.) Stuart Nelson; portfolio of 99 residential and
Adele Archer nursing homes located in
England, Wales, and Northern
The transaction, acquired by Four Seasons Health Care (which was itself purchased by Allianz AG in August 2004), is backed by rental
payments from residential and nursing homes located in the U.K. The ratings were affirmed in September 2005, reflecting relative
overperformance since the stress period of 2001-2002, supported by improved industry fundamentals and tenant consolidation. PHF 1's
operating profit margins have been stable and consistently above 28% over the past 18 months. Rental coverage and occupancy levels,
although improved, continue to lag the sector for some tenants, however. Furthermore, the business model underlying the structure has
changed since closing, with a shift to an owner-operator model. As with the other real estate-backed transactions, we consider that PHF
1 now requires additional cushion due to its increased exposure to operator risk. Net operating income to rental coverage, although
improving, stood at 1.34x in March 2005, below our assessed sustainable level of 1.50x.

Tiara Securities Issuer B.V.

Principal Healthcare AAA; A; BBB March 23, 1999 Michela Bariletti; This securitization is backed by a
Finance (U.K) Stuart Nelson; portfolio of 83 residential and
Archer Adele nursing homes located in
England, Wales, and Northern
Driven by the same credit metrics as PHF 1, Tiara has outperformed the higher leveraged PHF 1 transaction, experiencing stronger
rental and interest coverage levels driven by the portfolio's achievement of relatively high fee rates, despite some declines in occupancy
levels. The transaction has shown increasing operating profit margins of above 30%. Net operating income to rental coverage stood at
1.53x in March 2005, slightly above our assessed sustainable level of 1.50x.

UK Hospitals No. 1 S.A.

British United Provident A; BBB July 17, 2002 Robert Robinson; This is a partial business
Assoc. Ltd. (BUPA) Michela Bariletti securitization, securitizing the
cash flows of BUPA's hospitals
In July 2005, BUPA sold nine non-core hospitals within the securitization to Legal & General Ventures for approximately £85 million. Sale
proceeds and retained cash were used to repay all £120 million outstanding floating-rate debt at the October 2005 interest payment date,
reducing pro forma total debt to EBITDA to 3.7x from 5.8x. Surplus cash of £30 million was distributed to other parts of the BUPA group,
leaving a reduced retained cash balance of £10 million. The effect of the disposal and dept repayment was rating neutral because 29% of
outstanding debt was prepaid, compared with a 14% loss of pre-disposal EBITDA from lower income-producing assets. The pro forma
outstanding debt relative to the strengths of the remaining business means that the transaction post disposal and repayment will not be
weakened in terms of expected cash generation, or in terms of debt service coverage. The transaction has continued to perform above
our base-case forecasts despite margin pressures. Factors contributing to this level of performance include a growth in NHS work,
favorable shifts in case mix, increased volumes of self-pay work, and cost reduction plans over the past year. Pro forma for the disposals,
BUPA's FCF DSCR was 2.01x for the 12-month period to Sept. 30, 2005, and we expect this ratio to continue to increase over time.

U.K. Care No. 1 Ltd.

British United Provident AAA; A Feb. 17, 2000 Stuart Nelson; This transaction is backed by a
Assoc. Ltd. (BUPA) Michela Bariletti portfolio of nursing home assets
owned and operated by BUPA.

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
www.standardandpoors.com/ratingsdirect Page 5 of 8
489219 | 300253543
Table 1

Details Of European Health Care Securitizations (cont.)

The transaction continues to perform more strongly than the comparable NHP and Four Seasons nursing home securitizations,
demonstrating the efficiencies — albeit with heightened operational risk — brought about by a single strong operator compared with a
pool of weaker operators. Net operating income has been growing at more than 10% per year due to above-average fee rates and
occupancy rates of 92%, resulting in rental coverage of 2.3x and interest coverage of 4.5x.
*Ratings are as of Jan. 24, 2006. SPUR — Standard & Poor's underlying rating.

Table 2

Comparative Analysis For Real Estate-Backed Transactions

Care Homes Care Homes Talisman-2 (Priory) U.K. Care
No. 2 Ltd. No. 3 Ltd. PHF 1 Tiara Finance PLC No. 1 Ltd.
'AAA' rated debt* (mil. £) 180 128 100 82 190 175
'AA' rated debt* (mil. £) — — — — 65 —
'A' rated debt* (mil. £) 60 42 30 65 60
'BBB' rated debt* (mil. £) 25 24 50 10 55 —
Total debt (mil. £) 265 194 150 122 375 235
Average weekly fee (£) 507 503 424 459 2,000+ 540
Occupancy (%) 92.0 91.0 85.3 80.8 70-100 93.0
Revenues (mil. £) 137.1 106.5 83.1 66.1 190.0 190.6
Costs (mil. £) 94.8 74.0 59.7 45.8 138-140 130.3
Net operating income 42.3 32.5 23.4 20.4 50-52 60.4
(mil. £)
Margin (%) 30.8 30.5 28.1 30.7 27.0 32.0
Rent (mil. £) 27.4 20.7 17.5 13.3 43.6 23.0
Rent coverage¶ (x) 1.54 1.57 1.34 1.53 1.20 2.62
'AAA' ICR§ (x) 4.42 4.65 3.26 4.20 2.19 5.47
Operating income decline 77 78 70 76 N.A. 82
before default (%)
'AA' ICR N/A N/A N/A N/A 1.8 N/A
'A' ICR§ (x) 3.19 3.36 N/A 2.94 1.7 3.89
Operating income decline 69 70 N/A 66 N.A. 74
before default (%)
'BBB' ICR§ (x) 2.81 2.84 2.08 2.64 1.47 N/A
Operating income decline 64 65 52 62 N.A. N/A
before default (%)
*Rating category. (Each category includes all ratings falling within that category. For example, the 'BBB' rating category includes 'BBB+',
'BBB', and 'BBB-' ratings.) ¶Rent coverage is calculated as net operating income divided by rent. §ICR is calculated as cumulative net
operating income divided by cumulative interest. N/A - Not applicable. N.A. - Not available.

Table 3

Comparative Analysis For Operating Cash Flow-Backed Transactions

GHG Finance Ltd. UK Hospitals No. 1 S.A.* Craegmoor Funding No.2
'A' rated debt¶ (mil. £) §428.0 175.0 §149.0
'BBB' rated debt¶ (mil. £) 227.5 120.0 N/A
Total debt (mil. £) 655.5 295.0 236.0
Average weekly fee (£) N.A. N.A. 700
Occupancy (%) 55-60 55-60 92.0

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
Standard & Poor’s | RatingsDirect Page 6 of 8
489219 | 300253543
Table 3

Comparative Analysis For Operating Cash Flow-Backed Transactions (cont.)

Revenues (mil. £) 662.6 404.0 143.5
Costs (mil. £) 491.0 329.0 115.0
Net operating income (mil. £) 171.6 75.3 27.9
Margin (%) 25.9 18.6 19.4
'A' EBITDA DSCR** (x) 3.92 N.A. 2.04
'A' FCF DSCR** (x) 3.24 N.A. 1.79
Total debt EBITDA DSCR** (x) 2.11 2.63 1.37
Total debt FCF DSCR** (x) 1.740 2.010 1.202
*Pro forma for nine hospital disposals. ¶Rating category. (Each category includes all ratings falling within that category. For example, the
'BBB' rating category includes 'BBB+', 'BBB', and 'BBB-' ratings.) §Underlying rating (wrapped to 'AAA' - £333 mil. of GHG. All
Craegmoor debt is wrapped). **The DSCR is calculated as cumulative net operating income divided by cumulative interest and principal
repaid. N/A - Not applicable. N.A. – Not available.

Related Articles
• "Stability Remains For Corporate Securitization Ratings Despite Ongoing Restructuring"
(published Jan. 16, 2006).
• "UK Healthcare Securitization Craegmoor Remains On CreditWatch Negative" (published Dec.
22, 2005).
• "Presale: Talisman-2 (Priory) Finance PLC" (published Dec. 6, 2005)
• "Transaction Update: Care Homes No. 2 Ltd. And Care Homes No. 3 Ltd." (published Oct. 10,
• "Transaction Update: Tiara Securities Issuer B.V. and PHF Securities No. 1 Ltd." (published
Sept. 9, 2005).
• "Transaction Update: UK Hospitals No. 1 S.A." (published July 27, 2005).
• "Bulletin: Ratings On GHG Finance Ltd. Unaffected By Disposal Of BMI Health Services Ltd."
(published July 11, 2005).
• "Rating Affirmations And Their Impact On Investors" (published April 20, 2005)
• "Bulletin: Ratings Affirmed On GHG Finance Ltd. Notes Following Partnerships in Care Sale"
(published April 12, 2005).

Additional Contacts: International Public Finance Ratings Europe;

Structured Finance Europe;

Standard & Poor's. All rights reserved. No reprint or dissemination without S&Ps permission. See Terms of Use/Disclaimer on the last page.
www.standardandpoors.com/ratingsdirect Page 7 of 8
489219 | 300253543
Copyright © 2007, Standard & Poors, a division of The McGraw-Hill Companies, Inc. (S&P). S&P and/or its third party licensors
have exclusive proprietary rights in the data or information provided herein. This data/information may only be used internally for
business purposes and shall not be used for any unlawful or unauthorized purposes. Dissemination, distribution or reproduction of
this data/information in any form is strictly prohibited except with the prior written permission of S&P. Because of the possibility of
human or mechanical error by S&P, its affiliates or its third party licensors, S&P, its affiliates and its third party licensors do not
guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions
or for the results obtained from the use of such information. S&P GIVES NO EXPRESS OR IMPLIED WARRANTIES, INCLUDING,
no event shall S&P, its affiliates and its third party licensors be liable for any direct, indirect, special or consequential damages in
connection with subscribers or others use of the data/information contained herein. Access to the data or information contained
herein is subject to termination in the event any agreement with a third-party of information or software is terminated.

Analytic services provided by Standard & Poor's Ratings Services (Ratings Services) are the result of separate activities designed to
preserve the independence and objectivity of ratings opinions. The credit ratings and observations contained herein are solely
statements of opinion and not statements of fact or recommendations to purchase, hold, or sell any securities or make any other
investment decisions. Accordingly, any user of the information contained herein should not rely on any credit rating or other opinion
contained herein in making any investment decision. Ratings are based on information received by Ratings Services. Other
divisions of Standard & Poor's may have information that is not available to Ratings Services. Standard & Poor's has established
policies and procedures to maintain the confidentiality of non-public information received during the ratings process.

Ratings Services receives compensation for its ratings. Such compensation is normally paid either by the issuers of such securities
or third parties participating in marketing the securities. While Standard & Poor's reserves the right to disseminate the rating, it
receives no payment for doing so, except for subscriptions to its publications. Additional information about our ratings fees is
available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they
have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted.
To reprint, translate, or use the data or information other than as provided herein, contact Client Services, 55 Water Street, New
York, NY 10041; (1)212.438.9823 or by e-mail to: research_request@standardandpoors.com.

Copyright © 1994-2007 Standard & Poors, a division of The McGraw-Hill Companies.

All Rights Reserved.

Standard & Poor’s | RatingsDirect Page 8 of 8

489219 | 300253543