Fitch Ratings has assigned a "BBB" rating to $46 million of series 2014 revenue bonds issued on behalf of Karnes County Hospital District — which does business as Otto Kaiser Memorial Hospital in Kennedy, Texas — to fund construction of a new hospital and wellness center.
The rating assignment was supported by a number of factors, including KCHD's improved liquidity due to increased tax revenues. The hospital district's unrestricted cash and investment grew from $2.5 million in 2010 to over $13.6 million in 2014.
In addition, the rating assignment was supported by KCHD's critical access hospital designation, which leads to favorable reimbursement.
KCHD faces some challenges, which were considered for the rating assignment, such as the risks associated with the construction, completion and occupancy of the replacement facility.
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