NEW YORK--(BUSINESS WIRE)--Fitch Ratings has affirmed the 'F1+' short-term rating on the following revenue bonds based on self-liquidity of Catholic Health Initiatives (CHI):
--$37,800,000 Kentucky Economic Development Finance Authority (KEDFA) series 2004C weekly variable rate demand bonds (VRDBs);
--$58,900,000 Chattanooga Health, Educational & Housing Facility Board series 2004C weekly VRDBs;
--$741,085,000 Catholic Health Initiatives series A and B taxable commercial paper (CP).
In addition, Fitch withdraws its 'F1+' short-term rating on the following, as the bonds are were reoffered in floating rate note mode and are no longer subject to a short-term put.
--$52,720,000 KEDFA series 2011B-1;
--$52,720,000 KEDFA series 2011B-2;
--$52,715,000 KEDFA series 2011B-3;
--$200,000,000 Washington Health Care Facilities Authority series 2013B.
CHI's long-term rating is 'A+' with a Negative Outlook.
KEY RATING DRIVERS
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 Oct. 31, 2015, 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.
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.
LONG-TERM RATING LINKAGE: A downgrade of CHI's long-term rating to below 'A+' would trigger a corresponding lowering of CHI's short-term rating.
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: $96.7 million in weekly VRDBs and $741.1 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 $105 million of long-term put bonds that were due as of Oct. 31, 2015, but were successfully remarketed in November 2015.
At Oct. 31, 2015, CHI had approximately $3 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 Affirms Catholic Health Initiatives (CO) Revs at 'A+'; Outlook Revised to Negative' from Dec. 19, 2014, which is available at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Rating U.S. Public Finance Short-Term Debt (pub. 17 Nov 2015)
Revenue-Supported Rating Criteria (pub. 16 Jun 2014)
U.S. Nonprofit Hospitals and Health Systems Rating Criteria (pub. 09 Jun 2015)
Dodd-Frank Rating Information Disclosure Form