Standard & Poor's Ratings Services said it lowered its rating to CC from B-minus on $726 million series 2007A bonds issued for West Penn Allegheny Health System by the Allegheny County Hospital Development Authority, Pa. and removed it from CreditWatch where it had been placed with negative implications on Sept. 28.

"The lower rating reflects our opinion of Highmark Inc.'s desire to have WPAHS declare bankruptcy or otherwise restructure its debt and pension obligations prior to any affiliation and the breakdown of the affiliation discussions after WPAHS notified Highmark that it was in breach of the agreement," said Standard & Poor's credit analyst Cynthia Keller. "Although talks have resumed after a legal ruling prohibited WPAHS from seeking other suitors, there remains significant uncertainty as to whether the parties will reach an agreement that will receive subsequent approval by the Pennsylvania Insurance Department," said Keller.

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