S&P downgrades Lucile Salter Packard Children’s Hospital’s debt to ‘A+’

S&P Global Ratings downgraded Palo Alto, Calif.-based Lucile Salter Packard Children’s Hospital’s revenue bonds to “A+” from “AA-.” The bonds were previously issued by the California Health Facilities Financing Authority.

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Additionally, S&P assigned its “A+” rating to Lucile Salter Packard Children’s Hospital’s $200 million series 2017A hospital revenue bonds.

“The rating change reflects a combination of factors which we believe make LPCH less flexible financially, particularly as the organization is gearing up to open and transition to a new hospital,” Suzie Desai, an S&P Global Ratings credit analyst, said.

The assignment is based on several factors, including the hospital’s strong market position, affiliation with Stanford University, healthy revenue base and solid unrestricted reserves. S&P also acknowledged the hospital’s increased capital spending and recently light operating income.

The outlook is stable. 

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