Fitch Ratings has assigned a long-term underlying rating of 'A' to bank bonds corresponding to variable-rate demand obligations issued on behalf of Bon Secours Health System, Inc. (BSHSI) as follows:
--Henrico County Economic Development Authority (VA) (Bon Secours Health System, Inc.) variable-rate revenue bonds series 2002B;
--Hanover County Industrial Development Authority (VA) (Bon Secours Health System, Inc.) variable-rate revenue bonds series 2002B;
--Norfolk Economic Development Authority (VA) (Bon Secours Health System, Inc.) variable-rate refunding bonds series 2005A;
--South Carolina Jobs-Economic Development Authority (SC) (Bon Secours Health System, Inc.) variable-rate economic development revenue bonds ser 2002B.
Fitch also affirms its underlying 'A' rating on BSHSI's outstanding debt. The Rating Outlook is Stable.
Although 50% of BSHSI's $1.1 billion debt consists of VRDOs, and $350 million is currently held as bank bonds, the health system's interest rate and term-out risk is relatively low. The cure period for all reimbursement agreements is 366 days, and bank rates are capped at the higher of the bank's prime rate plus 1% or the Federal funds rate plus 2%. BSHSI's long-term credit rating and its strengthening credit profile strongly imply favorable access to long-term capital when debt markets stabilize. BSHSI is planning to refinance all of its outstanding insured variable rate demand debt.
For more information on BSHSI, please see Fitch research dated Sept. 17, 2008 at www.fitchratings.com.
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