Standard & Poor's on Monday lowered its rating to A-minus from A on Leesburg's $108.3 million of outstanding hospital bonds issued on behalf of Leesburg Regional Medical Center.
The outlook on all of the debt is negative.
The downgrade affects $82.1 million of revenue bonds, Series 1996A, 2002, and 2003, as well as the underlying rating on $26.2 million of insured auction-rate revenue bonds, Series 2001. The AAA rating on the 2001 bonds, based on insurance from Ambac Assurance Corp., remains intact.
The downgrade primarily reflects declines in liquidity driven by the unwinding of the medical center's affiliation with Orlando Regional Medical Center, as well as the continuing support of a non-obligated subsidiary called the Villages Regional Hospital, a new 60-bed community hospital, Standard & Poor's analyst Martin Arrick said in a statement.
"The negative outlook reflects the potential for a significant increase in debt during the next two years," Arrick added.
The Leesburg Regional Medical Center is contemplating a guarantee for $80 million to $100 million of new debt issuance by Villages for expansion needs.
In March, Moody's Investors Service downgraded its rating on the medical center to A3 from A2, and also placed a negative outlook on the debt. It is not rated by Fitch Ratings.
