Fitch Ratings on Wednesday afternoon placed A-plus rated bonds issued by the Connecticut Health and Educational Facilities Authority on behalf of William W. Backus Hospital on rating watch evolving.
The move affects $63.1 million of debt related to the Norwich, Conn., hospital, in the eastern part of the state. Rating watch evolving means the rating on the debt can be affirmed, lowered, raised or withdrawn, according to Fitch,
The bonds consist of $8.6 million of Series E revenue bonds, $28.7 million of Series F revenue and refunding bonds, and $25.8 million of Series G revenue bonds.
Fitch said in a statement that the new status reflects uncertainty surrounding the affiliation agreement between Backus Hospital and Hartford HealthCare, which Fitch rates A with a stable outlook.
Ambac Assurance Corp, insures the Series E bonds and Assured Guaranty Municipal Corp. insures the Series F and G bonds.
State officials approved the agreement in July. Key provisions include a capital commitment by Hartford HealthCare to an east region, which will include Backus and ongoing funding for medical staff development. “Management has indicated that they are reviewing and may refinance WBH’s outstanding debt and may join Hartford’s obligated group,” Fitch said.
Hartford HealthCare is also the parent company of Hartford and Windham hospitals, the New Britain-based Hospital of Central Connecticut, and MidState Medical Center in Meriden.