Fitch Ratings has assigned an "AA-" rating to approximately $135 million of series 2015 revenue bonds issued on behalf of Santa Barbara, Calif.-based Cottage Health System, with $100 million of the proceeds to be used to fund future capital expenditures at 450-bed Santa Barbara Cottage Hospital.
The series 2015 bonds are being issued by California Statewide Communities Development Authority and are expected to price the week of Jan. 12, according to Fitch.
The rating assignment was supported by a number of factors, including Cottage Health System's solid profitability and a rebound in its liquidity. As of Sept. 30, 2014, the system had 370.8 days cash on hand.
The system also faces some challenges, which were considered for the rating assignment, such as having a moderately high debt burden, according to Fitch.
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