Bangkok--16 Sep--Standard & Poor's
Standard & Poor's Ratings Services revised its outlook to negative from stable on the Washington Health Care Facilities Authority's (WHCFA) and Oregon Facilities Authority's (OFA) 'AA-' rated revenue bonds, issued on behalf of PeaceHealth, Wash. At the same time, Standard & Poor's assigned its 'AA-' long-term rating to OFA's $105.24 million series 2009 bonds, issued for PeaceHealth, and WHCFA's $100.025 million series 2009 bonds, also issued for PeaceHealth. Finally, Standard & Poor's affirmed its 'AA-' long-term and underlying rating (SPUR) on PeaceHealth's outstanding debt.
Standard & Poor's also raised its rating to 'AAA/A-1+' from 'AA+/A-1+' and removed from CreditWatch with developing implications WHCFA's series 2008BCD variable-rate demand bonds (VRDBs). At the same time, Standard & Poor's lowered its rating to 'AA-/A-1+' from 'AA+/A-1+' and removed from CreditWatch with developing implications OFA's series 2008AB VRDBs. Finally, Standard & Poor's affirmed its 'AA/A-1+' rating on OFA's series 2008CD VRDBs; the bonds remain on CreditWatch with positive implications.
The rating actions on WHCFA's series 2008BCD VRDBs and OFA's series 2008ABCD VRDBs reflect Standard & Poor's recent update to our methodology and assumptions for rating jointly supported obligations. Additionally, this action follows rating actions already taken on multiple letter of credit (LOC) backed issues for which an underlying rating (SPUR) already exists, as well as subsequent rating action on US Bank and Wells Fargo.
"The negative outlook primarily reflects PeaceHealth's very strained balance sheet, which is related to considerable capital spending and upheaval in the capital market, combined with softer operating results," said Standard & Poor's credit analyst Geraldine Poon. "The weaker balance sheet provides PeaceHealth less operating flexibility. However, the rating remains supported by its excellent business position and our expectation that the strong management team will generate improved financial performance going forward."
Bond proceeds will be used to restructure PeaceHealth's existing debt, resulting in little new debt.
PeaceHealth remains very well positioned in each of its four Pacific Northwest markets, with excellent market positions and an appropriate business strategy tailored to each region. It maintains facilities in the following regions: Eugene, Ore.; Whatcom, Wash.; Lower Columbia, Wash.; and Alaska.
RELATED RESEARCH
USPF Criteria: "Not-For-Profit Health Care," June 14, 2007
USPF Criteria: "Debt Derivative Profile Scores," March 27, 2006
Criteria: Methodology And Assumptions: Approach To Evaluating Letter Of Credit-Supported Debt, July 6, 2009
USPF Criteria: "Municipal Applications For Joint Support Criteria," June 25, 2007
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com.
All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact: Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Geraldine Poon, San Francisco (1) 415-371-5078
Martin D Arrick, New York (1) 212-438-7963
Edward Ubiera, New York (1) 212 438 2034