PHOENIX - Standard & Poor's announced Friday that it is withdrawing its rating on Palm Drive Health Care District, Calif.'s bonds and notes after repeated attempts to get necessary information from the issuer failed.
The agency had warned two weeks ago that it might withdraw the ratings if the district did not get analysts what they needed. The announcement affects $9.8 million of parcel tax revenue bonds issued in 2005.
The debt had been rated at speculative-grade BB.
"This action follows repeated attempts by Standard & Poor's to obtain timely information of satisfactory quality to maintain our rating on the securities in accordance with our applicable criteria and policies," S&P said in a statement.
The district filed for Chapter 9 bankruptcy in April 2014 and later that month closed its Palm Drive Hospital in Sebastopol, about 50 miles northwest of San Francisco. The district's financial disclosures on EMMA reveal that it had been operating at a deficit for some time, and the rising costs of providing care eventually became too great to overcome. The district said in those disclosures, however, that it expected to be able to continue to meet its debt obligations.
The board of directors did not respond to a request for comment.
