Bangkok--14 Dec--Standard & Poor's
Standard & Poor's Ratings Services raised its underlying rating (SPUR) on Grand River Hospital District, Colo.'s general obligation (GO) bonds one notch to 'A' based on our view of the district's very strong economic growth in addition to sound financial operations, including consistent operating surpluses and good liquidity. At the same time, Standard & Poor's assigned its 'A' long-term rating to the district's series 2009 GO refunding bonds.
The rating also reflects our view of the district's economy anchored in government, oil and gas, mining, and tourism that has seen extremely high levels of growth over the past five years due to mineral price increases and new drilling activity. Added credit strengths include our assessment of the district's financial performance, which we consider strong, as well as improving fund balances, with the benefit of property tax support for operations, and a low overall debt burden as a percent of market value with limited future capital needs.
Offsetting factors include a significantly concentrated tax base in oil and gas production, which accounts for 90% of the district's assessed value (AV) and 66% of actual value, with the top 10 taxpayers accounting for 80% of AV.
"The stable outlook reflects our assessment of the hospital district's growing economic base, despite the heavy concentration in the oil and gas sector," said Standard & Poor's credit analyst Timothy Barrett. "In addition, the outlook reflects our expectation that the district will maintain its strong financial performance and cushion to smooth revenues if property tax revenues are interrupted due to a downturn in the oil and gas industry," said Mr. Barrett.
The district's full faith and credit pledge payable from unlimited ad valorem taxes levied on all of the district's taxable property secures the bonds. Bond proceeds will be used to refund the district's outstanding series 2000, 2001, and 2002 GO bonds.
Grand River Hospital District, with a population of about 27,000, serves the western half of Garfield County and a small area of Mesa County. The district operates one general acute-care facility, one nursing facility, and one medical center in Rifle, in addition to a medical center and a health and physical therapy facility in Parachute.
The district does not currently have plans to issue additional tax-supported debt as most of its capital needs in terms of modernization and renovation have been cash funded over the past five years.
RELATED RESEARCH
USPF Criteria: "GO Debt," Oct. 12, 2006
USPF Criteria: "Tax-Secured Hospital Debt," May 3, 2007
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and 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. Use the Ratings search box located in the left column.
Media Contact:
David Wargin, New York (1) 212-438-1579,
[email protected]
Analyst Contacts:
Timothy Barrett, New York (1) 212-438-6327
Kevin Holloran, Dallas (1) 214-871-1412
Key Contacts:
Americas Media Relations: (1) 212-438-6667
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[email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]