Fitch Ratings has downgraded the rating on approximately $683 million of series 2014A-C revenue bonds issued on behalf of Loma Linda (Calif.) University Medical Center by the California Statewide Communities Development Authority to "BB+" from "BBB-."
The rating downgrade was supported by a number of factors, including LLUMC's plan to issue approximately $816 million of additional debt in the second quarter of fiscal year 2016 to fund a portion of the cost of its campus transformation project due to state seismic requirements. With the expected additional debt, the system's pro forma liquidity metrics are weak even at the "BB+" rating level, according to Fitch.
LLUMC's strengths were also considered for the rating action, including its improved operating performance and good market position.
The system's outlook is negative.
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