Moody's Investors Service said it has downgraded to A3 from A2 the rating on Snohomish County Public Hospital District No. 3, Wash.'s general obligation limited tax bonds outstanding in the amount of $13.7 million.
The GOLT bonds are a general obligation of the district for which it covenanted to budget and levy ad valorem property taxes within the constitutional and statutory limitations of non-voter approved debt.
Concurrently, Moody's affirms the A1 rating on the district's GOULT bonds outstanding in the amount of $41.2 million. The GOULT bonds are secured by the district's full faith, credit, and unlimited property tax pledge.
The downgrade of the GOLT rating to A3 from A2 primarily reflects the district's challenging and highly competitive operating environment, along with modestly insufficient coverage of gross GOLT debt service over the near-term by operating property tax revenues that are constrained under state law. The rating also incorporates the district's small scale of operations and consistently modest financial performance.
The affirmation of the A1 GOULT rating reflects unlimited taxing authority for voter-approved debt and a dedicated debt service levy that is insulated from the district's healthcare enterprise risks, along with the district's moderately-sized tax base and somewhat affluent wealth levels.