California’s Community Memorial Health System and Maine’s MaineGeneral Health — two non-profit systems that rated BBB- or lower — are selling significant amounts of municipal debt this week to finance replacement hospital construction, according to a Bloomberg report.
Ventura, Calif.-based CMHS will issue $345 million through the city of San Buenaventura, Calif. The revenue bonds will finance a six-story replacement hospital in Ventura to comply with California seismic requirements.
Augusta, Maine-based MaineGeneral will sell $290 million through the Maine Health and Higher Educational Facilities Authority. Its revenue issue will be used for a 192-bed replacement hospital in Augusta. The debt is rated BBB- by Fitch, its lowest investment grade.
Potential reductions in Medicare reimbursement and cuts to Medicaid may make hospital bonds more vulnerable to downgrades, according to the report. This is contributing to the highest relative borrowing costs since 2009 for hospitals with low investment-grade ratings.
Read the Bloomberg report on Community Memorial Health System and MaineGeneral Health.
Related Articles on Community Memorial Health System and MaineGeneral Health:
California’s Community Memorial Obtains Bonds, Land for $320M Project
MaineGeneral Medical Center Files Certificate of Need Request for New Hospital
California Hospital Settles Former CEO’s Claims of Breach of Contract, Emotional Distress
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