Standard & Poor’s Tuesday upgraded its general obligation bond rating for the Palomar Pomerado Health District by three notches, to A-plus from BBB-plus. The action doesn’t quite reverse the agency’s four-notch downgrade of the hospital district from May.The May downgrade was the result of the agency’s sector-wide review of tax-supported hospital credits. Standard & Poor’s revised its criteria for all tax-secured hospital district debt to focus more on the credit quality of the hospital’s business operations, beyond the traditional tax-secured analysis. At least a dozen issuers were downgraded.Tuesday’s upgrade reflects Standard & Poor’s increased comfort with the district’s management of its large capital plan, the rating agency said in a news release. The outlook is stable.“We view management’s commitment to scale back its recently increased capital plan as needed and the steps it’s taking to control construction risk as favorable,” said credit analyst Paul Dyson.Moody’s Investors Service gives Palomar Pomerado GOs an underlying Aa3 rating, and Fitch Ratings assigns its AA-minus rating to the credit.The Standard & Poor’s upgrade affects $68 million of outstanding debt, plus $241 million of new bonds that priced Tuesday. The bulk of the bonds come due in 2037 with a 5.125% coupon and a yield of 4.56%.Citi managed the transaction, Kaufman Hall was financial adviser, and the deal carried MBIA Insurance Corp. insurance.
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