Fitch Affirms Catholic Health Initiatives' (CO) Self-Liquidity Bonds at 'F1+'

NEW YORK--()--Fitch Ratings has affirmed the 'F1+' short-term rating on the following revenue bonds based on self-liquidity of Catholic Health Initiatives (CHI):

--$100 million Washington Health Care Facilities Authority (WHCFA) series 2013B-1 windows variable rate demand bonds (VRDBs);

--$100 million WHCFA series 2013B-2 windows VRDBs;

--$52,720,000 Kentucky Economic Development Finance Authority (KEDFA) series 2011B-1 windows VRDBs;

--$52,720,000 KEDFA series 2011B-2 windows VRDBs;

--$52,715,000 KEDFA series 2011B-3 windows VRDBs;

--$37,800,000 KEDFA series 2004C weekly VRDBs;

--$58,900,000 Chattanooga Health, Educational & Housing Facility Board series 2004C weekly VRDBs;

--$66,600,000 St. Mary Hospital Authority series 2004C weekly VRDBs;

--$482,362,000 taxable commercial paper (CP).

In addition, Fitch withdraws its 'F1+' short-term rating on WHCFA series 2008A-4, 2008A-5, and 2008A-6 bonds, as the bonds are privately placed and no longer supported by self-liquidity.

CHI's long-term rating is 'A+'.

KEY RATING DRIVER

LIQUID RESOURCES AVAILABLE FOR UNREMARKETED PUTS: The 'F1+' rating is based on the sufficiency of CHI's liquid resources and written procedures to fund the purchase price on each mandatory tender date. As of Aug. 31, 2014, CHI's eligible cash and investments would cover the maximum mandatory put on self-liquidity bonds on any given date in excess of Fitch's 1.25x threshold required for the 'F1+' short-term rating. CHI posts monthly liquidity reports on EMMA.

RATING SENSITIVITY

MAINTENANCE OF ADEQUATE LIQUIDITY: Fitch expects CHI to maintain adequate internal liquid resources to cover its total put exposure in excess of 1.25x to maintain the 'F1+' short-term rating.

CREDIT PROFILE

The affirmation of the 'F1+' short-term rating is supported by the adequacy of CHI's highly liquid resources available to fund any un-remarketed puts on the following: $163.3 million in weekly VRDBs, $358.2 million Windows VRDBs, and $482.4 million outstanding CP notes (out of $881 million total authorization). The maximum amount of CP that can mature in a five-day period is $200 million. The self-liquidity analysis also incorporates $100 million of long-term put bonds that are due in Nov. 2014.

At Aug. 31, 2014, CHI had approximately $2.4 billion of highly liquid, unrestricted cash and fixed income securities, and dedicated working capital lines available. CHI has total funding sources available to meet the tender exposure in excess of Fitch's 'F1+' threshold of 1.25x. Fitch received a written internal procedures letter from the organization, which outlines internal policies to meet any funding requirements.

For additional information, please refer to Fitch's press release titled 'Fitch Rates Catholic Health Initiatives (CO) 2013 Rev Bonds 'A+/F1+'; Downgrades Outstanding Bonds' which is available at www.fitchratings.com.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'U.S. Nonprofit Hospitals and Health Systems Rating Criteria', May 30, 2014

--'Rating U.S. Public Finance Short-Term Debt', Dec. 9, 2013.

Applicable Criteria and Related Research:

U.S. Nonprofit Hospitals and Health Systems Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=746860

Rating U.S. Public Finance Short-Term Debt

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=724680

Additional Disclosure

Solicitation Status

http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=891814

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Contacts

Fitch Ratings, Inc.
Primary Analyst
Jennifer Kim, CFA, +1-212-908-0740
Associate Director
Fitch Ratings, Inc.
33 Whitehall
New York, NY 10004
or
Secondary Analyst
Jim LeBuhn, +1-312-368-2059
Senior Director
or
Committee Chairperson
Emily Wong, +1-415-732-5620
Senior Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Contacts

Fitch Ratings, Inc.
Primary Analyst
Jennifer Kim, CFA, +1-212-908-0740
Associate Director
Fitch Ratings, Inc.
33 Whitehall
New York, NY 10004
or
Secondary Analyst
Jim LeBuhn, +1-312-368-2059
Senior Director
or
Committee Chairperson
Emily Wong, +1-415-732-5620
Senior Director
or
Media Relations
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com