Fitch downgrads village's bonds

CHICAGO--Fitch Ratings has downgraded Friendship Village of Schaumburg's (FVS), Illinois outstanding $80.5 million of series 2005 A&B revenue bonds to 'BB- from 'BB' (issued through the Illinois Finance Authority). The Rating Outlook remains Negative. The downgrade to 'BB-' reflects the increasing difficulty of converting sales to move-ins, lower than projected occupancy in the Bridgegate (BG) apartments and a rate covenant violation in fiscal 2008. The continued weakness in the local residential real estate market combined with poor investment returns has made converting sales to move-ins exceptionally challenging. Management has been proactive in developing several marketing initiatives to counteract the current market environment. Fitch believes these strategies have been successful in improving overall sales relative to the initial contract offerings.