Moody's Investors Service has downgraded to Baa1 from A1 rating on Tulare Local Healthcare Districts, Calif.'s unlimited tax general obligation bonds outstanding in the amount of $85 million.
The outlook is negative.
The downgrade reflects the hospital district's significantly deteriorated fiscal operations characterized by decreased patient volumes and a large financial loss in fiscal 2012. The rating also incorporates the district's economic characteristics which include declines in property values, high unemployment and low wealth levels compared to the national averages.
Recently unstable executive management has also undermined the district's credit quality as the district has changed both its CEO and General Counsel within the last year. The negative outlook reflects the significant uncertainty surrounding the hospital's operations in the near-term.
