Standard & Poor's lowered its underlying rating on certificates of participation for the Children's Hospital & Research Center at Oakland (Calif.) to A from A-plus, citing turnaround challenges and heavy reliance on Medicaid and disproportionate share funding, under threat from a state budget deficit. The 205-bed hospital posted larger-than-usual operational losses in 2001 and 2002 with insufficient investment income to offset them, but management hopes to break even by the end of fiscal 2003, the rating agency said. Meanwhile, competing Lucile Salter Packard Children's Hospital in Palo Alto, Calif., withdrew from Stanford Hospital and Clinics' obligated group. Moody's Investors Service said the withdrawal is an "overall negative" for Stanford, which intends to issue about $250 million in tax-exempt bonds within four months. -- by Mary Chris Jaklevic
Calif. children's hospital sees rating lowered
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