San Diego-based Rady Children’s Hospital received an A-plus from Fitch Ratings on $150 million of bonds to be sold through negotiation the week of Nov. 7.
The California Health Facilities Financing Authority approved the sale at its Oct. 12 board meeting and will issue the bonds.
Bank of America Merrill Lynch, Morgan Stanley, and U.S. Bank are the underwriters.
Rady has 442 beds at an acute-care facility and 115 beds spread throughout several different locations. It provides inpatient and outpatient acute and intensive care pediatric services, home health, outpatient psychiatry, child protection, development services, and pharmaceutical services.
The bond proceeds will be used to refinance a portion of a Bank of America bridge loan recently used to purchase two medical office buildings adjacent to the hospital’s main campus, to renovate and equip the buildings, and to fund other capital projects, including reimbursement for prior eligible capital expenditures.
Fitch analysts cited Rady’s dominant market share of 83% of the greater San Diego County market, as well as the area’s limited competition for high acuity pediatric services.
The hospital also possesses a strong balance sheet with a history of good profitability.
Analysts’ only cautionary note was that Rady’s debt burden is on the high side.