Standard & Poor's Ratings Services said it lowered its long-term rating to BB-plus from BBB on the California Statewide Communities Development Authority's $574 million series 2014A, $123 million series 2014B, and $13 million series 2014C revenue bonds, issued for Loma Linda University Medical Center (LLUMC).
The outlook remains negative.
With this review S&P is reclassifying LLUMC as a multisite system, because LLUMC now meets its system definition by having three or more hospitals and operating revenues in excess of $1.5 billion.
"The downgrade and continuing negative outlook reflect LLUMC's extremely large campus transformation project that is now board approved for a total cost of $1.049 billion, up from an estimated $926.3 million at the time of our previous analysis," said Standard & Poor's credit analyst Kenneth Gacka. "In our view, the magnitude of the now-final approved project and the planned debt issuance in less than a year, on top of LLUMC's balance sheet, which we believe is currently thin, prompt the downgrade."
