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Amended - Fitch Rates Bon Secours Health's (Maryland) Bank Bonds 'A'; Outlook Stable
NEW YORK-(Business Wire)-October 3, 2008 - (This is an amendment to the release that went out earlier today. It adds the issuers also being affirmed.)
Fitch Ratings has assigned a long-term underlying rating of 'A' to bank bonds corresponding to variable-rate demand obligations issued on behalf of Bon Secours Health System, Inc. (BSHSI) as follows:
—Hanover County Industrial Development Authority (VA) (Bon Secours Health System, Inc.) variable-rate revenue bonds series 2002B,
—Henrico County Economic Development Authority (VA) (Bon Secours Health System, Inc.) variable-rate revenue bonds series 2002B,
—Norfolk Economic Development Authority (VA) (Bon Secours Health System, Inc.) variable-rate refunding bonds series 2005A,
—South Carolina Jobs-Economic Development Authority (SC) (Bon Secours Health System, Inc.) variable-rate economic development revenue bonds ser 2002B.
Fitch also affirms its underlying 'A' rating on BSHSI's outstanding debt. The Rating Outlook is Stable. The affirmation applies to outstanding BSHSI obligations issued by the entities listed above, as well as:
—Chesterfield County Industrial Development Authority (VA)
—Russell (KY)
—Michigan State Hospital Finance Authority (MI)
—Venice (FL)
—Bon Secours Health Care System (MD)
—Maryland Industrial Development Financing Authority (MD)
—Peninsula Ports Authority (VA)
—New York State Dormitory Authority (NY)
Although 50% of BSHSI's $1.1 billion debt consists of VRDOs, and $350 million is currently held as bank bonds, the health system's interest rate and term-out risk is relatively low. The cure period for all reimbursement agreements is 366 days, and bank rates are capped at the higher of the bank's prime rate plus 1% or the Federal funds rate plus 2%. BSHSI's long term credit rating and its strengthening credit profile strongly imply favorable access to long-term capital when debt markets stabilize. BSHSI is planning to refinance all of its outstanding insured variable rate demand debt.
For more information on BSHSI, please see Fitch research dated Sept. 17, 2008 at www.fitchratings.com.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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