Standard & Poor's last week downgraded the underlying rating of Rockdale Medical Center Inc. to BBB from BBB-plus, affecting $50 million of insured revenue bonds sold through the Rockdale County Hospital Authority in 2003.
The agency found that after a series of very stable and profitable years, the center experienced a rapid and significant decline in operations, resulting in fiscal 2005 operating and excess losses of $15.1 million. That caused it to fail to generate positive coverage of maximum annual debt service, according to analyst Kevin Holloran.
"The losses were significant enough that maximum annual debt service coverage in fiscal 2005 fell below covenanted levels, resulting in a covenant violation," he said.
The center operates Rockdale Hospital, two medical office buildings, and a diagnostic imaging center. The 107-bed Rockdale Medical Center is the sole hospital provider in Rockdale County, Holloran said.
