Standard & Poor’s lowered its rating one notch on $35 million of outstanding bonds issued for Casa Colina Inc. and Affiliates to BBB from BBB-plus.
The Pomona-based physical rehabilitation center had its existing 2001 bond series downgraded based on plans to issue $50 million of new, privately placed bonds to fund an expansion, according to the rating agency’s report.
The California Health Facilities Financing Authority issued the Series 2001 bonds for the rehabilitation center that serves patients with orthopedic, trauma and respiratory conditions.
The bonds were downgraded based on Casa Colina’s “upcoming multi-year expansion project and anticipated debt issuance,” S&P credit analyst Kenneth Gracka said in a statement.
Casa Colina plans to construct a 31-bed acute-care addition to its current rehab facility, build a medical office building and install an electronic medical records system.
Gracka expressed concern about the impact on the center’s debt-service metrics if it issues new bonds and its ability to repay the debt if the addition of the new services do not immediately bolster revenues.