Moody's Investors Service said it has downgraded Citrus Memorial Hospital, Fla.'s bond rating to Caa3 from B3, affecting $37.5 million of Series 2002 fixed rate revenue bonds issued by the Citrus County Hospital Board.
The rating downgrade is based on significant depletion in unrestricted liquidity, debt acceleration risk and continued poor financial performance that increases the risk of a payment default. The rating outlook remains negative.
The rating downgrade to Caa3 is based on significant deterioration in CMH's financial position with the depletion in unrestricted liquidity, reflecting anemic cash flow and the pre-payment of debt at the end of the last fiscal year (FYE 9/30/13).
Elevated credit risk is compounded by debt acceleration risk with the violation of the days cash on hand covenant at the last measurement period and expectation that the covenant would be violated at future measurement periods and thin headroom to the debt service coverage covenant.
