Moody’s Investors Service said it has upgraded the El Camino Hospital District’s underlying revenue bond rating to A1 from A2, affecting $150 million of outstanding bonds issued by the Santa Clara County, Calif., Financing Authority.
The outlook is stable at the new rating level.
The upgrade reflects Moody’s positive assessment of El Camino Hospital’s ability to maintain very strong cash flow, and build balance sheet strength, while avoiding disruptions or cost-overruns from the construction of their replacement hospital adjacent to the current facility.
The upgrade is in conjunction with El Camino’s plans to convert the series 2007 auction-rate bonds to fixed rate.
The series 2007 bonds are insured by Ambac Assurance Corp. and retain Ambac’s current claim paying rating of Aaa, with a negative outlook.
El Camino intends to issue an additional $100 million of revenues bonds later this calendar year, which Moody’s believes can be absorbed at the current rating level.
El Camino Hospital District’s 2006 general obligation bonds are rated Aa2, and are secured by the district’s voter-approved unlimited property tax pledge.