Standard & Poor's Ratings Services said it lowered its long-term rating to BBB-minus from BBB on Jefferson Parish Hospital Service District No. 1, La.'s series 2011 hospital revenue and refunding bonds, and its underlying rating (SPUR) to BBB-minus from BBB on the district's series 1998B bonds.
All bonds were issued for Jefferson Parish Hospital District No. 1, doing business as West Jefferson Medical Center (WJMC). The series 1998B bonds are insured by Assured Guaranty Municipal Corp. The outlook is stable.
"The rating action reflects our view of WJMC's third year of increasing operating losses coupled with two years of declines in unrestricted reserves," said Standard & Poor's credit analyst Suzie Desai. "These factors have decreased overall financial flexibility for the credit, especially given the moderate debt levels," Desai added.
The stable outlook reflects WJMC's strong market position, stable medical staff, and good cash flow that is contributing to adequate MADS coverage that is close to 2.5x. The outlook also reflects the anticipation that WJMC will likely affiliate with a partner and begin its turnaround plan to reduce its operating losses in fiscal 2015.
