Fitch Ratings said it has downgraded the rating on approximately $37.4 million series 2002 bonds issued by the Citrus County Hospital Board (Citrus Memorial Health Foundation, Inc.) on behalf of Citrus Memorial Hospital, Fla., (CMH) to C from B-minus.
The bonds remain on rating watch evolving.
The series 2002 bonds are secured by a pledge of gross revenues of the Foundation and a debt service reserve fund.
Downgrade reflects potential payment default. The rating downgrade to C reflects CMH's very limited options if the current negotiations of the sale/lease of CMH to Hospital Corporation of America (HCA) cannot be completed in a timely manner.
Given a deterioration in its cash position and the violation of its days cash on hand covenant, CMH is at risk for a potential debt acceleration scenario. As of Feb. 28, 2014, CMH had $12.2 million of unrestricted cash and investments compared to $45.6 million of debt outstanding.
