Hospital Bonds Boosted

Moody’s Investors Service Tuesday upgraded to Aa1/VMIG 1 from Aa3/VMIG 1 the rating assigned to Leesburg revenue bonds issued on behalf of the Villages Regional Hospital project.

The upgrade, affecting $75 million of Series 2006 bonds, was in conjunction with the issuance of a letter of credit from the Bank of Nova Scotia. The bonds also were supported by an insurance policy from Radian Asset Assurance Inc. and a standby bond purchase agreement provided by the bank, which was cancelled when the LOC was issued, said a report by analyst Michael Loughlin.

The new rating reflects the credit quality of the bank and a transaction structure that ensures timely payment of debt service and purchase price to investors, Loughlin said. Moody’s currently rates the Bank of Nova Scotia Aa1 for its long-term bank deposits and Prime-1 for its short-term bank deposits. The rating outlook is stable.

Moody’s rating, based upon the letter of credit, only applies to bonds bearing interest in the weekly-rate mode.

Bond proceeds were used to fund a 138-bed expansion to the existing 60-bed Villages Regional Hospital as well as finance cardiac and catheterization units and other areas. Approximately $5 million was used to refund Series 2001 bonds issued on behalf of the hospital by the Sumter County Industrial Development Authority.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER