Standard & Poor’s on Friday lowered its rating to AA-plus from AAA on various long-term bonds issued for the Nemours Foundation. Fitch Ratings on Sept. 21 dropped its rating on the credit to AA-plus from AAA.
Both agencies said the downgrade was prompted by a planned offering on behalf of Nemours by the Orange County Health Facilities Authority to finance the construction of a 96-bed children’s hospital in Orlando. The foundation is preparing to sell $303 million of fixed- and variable-rate bonds for hospital construction with an additional $24.3 million sold as refunding bonds.
“The downgrade reflects our opinion of the foundation’s increased debt and business risk,” said a report by Standard & Poor’s analyst Mary Peloquin-Dodd. “The action also incorporates our view of the increasing business risk represented by the construction of a new hospital in a competitive health care market.”
Both Fitch and Standard & Poor’s said the outlook is stable.