Fitch Ratings has upgraded the rating to "A-" from "BBB+" on approximately $92.7 million of series 2012 bonds issued on behalf of 435-bed South Nassau Communities Hospital in Oceanside, N.Y.
The rating upgrade was supported by a number of factors, including the hospital's significant reduction in leverage. South Nassau paid off all of its leases in December 2013 with a line of credit, which was then repaid in March 2014 from a grant from the New York State Department of Health, which resulted in the hospital's maximum annual debt coverage being cut in half.
The rating upgrade was also supported by South Nassau's purchase of 162-bed Long Beach (N.Y.) Medical Center's assets. Long Beach sustained heavy flooding damage from Hurricane Sandy in October 2012. In February, Long Beach filed for Chapter 11 bankruptcy, and that same month South Nassau signed a purchase agreement to acquire the physical assets and up to $1 million of unpaid employee obligations from Long Beach. The purchase of the assets has made South Nassau eligible to receive between $160-175 million of Federal Emergency Management Agency funds for the damages Long Beach sustained.
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