|[January 04, 2013]
Fitch Rts $63.6MM St. Mary Hosp Auth, Hlth Sys Revs, Catholic Health East, Ser 2012B 'AA-/F1+'
NEW YORK --(Business Wire)--
Fitch Ratings assigns a rating of 'AA-/F1+', Stable Outlook to the
$63,615,000 Saint Mary Hospital Authority, health system revenue bonds,
Catholic Health East Issue, series 2012B. The rating is based on the
support provided by an irrevocable direct- pay letter of credit (LOC)
issued by The Bank of New York Mellon (rated 'AA-/F1+', Stable Outlook
The bank is obligated to make regularly scheduled payments of principal
of and interest on the bonds in addition to payments due upon maturity,
acceleration and redemption, as well as purchase price for tendered
bonds. The ratings will expire upon the earliest of: (a) Jan. 9, 2018,
the initial stated expiration date of the LOC, unless such date is
extended; (b) two days after the conversion to an interest rate mode
other than the daily or weekly rate; (c) any prior termination of the
LOC; and (d) defeasance of the bonds. The LOC provides full and
sufficient coverage of principal plus an amount equal to 42 days of
interest at a maximum rate of 12 % based on a year of 365 days and
purchase price for tendered bonds, while in the daily or weekly rate
mode. The Remarketing Agent for the bonds is J.P. Morgan Securities LLC.
The bonds are expected to be delivered on or about Jan. 9, 2013.
The bonds initially bear interest at a weekly rate, but may be converted
to a daily, unit pricing, term, index, stepped coupon or fixed rate.
While bonds bear interest in the weekly and daily rate modes, interest
payments are on the first business day of each month, commencing Feb. 1,
2013. The trustee is obligated to make timely draws on the LOC to pay
principal, interest, and purchase price. Funds drawn under the LOC are
held uninvested, and are free from any lien prior to that of the
Holders may tender their bonds on any business day while in the weekly
or daily rate modes, provided the remarketing agent and tender agent are
given the requisite prior notice of the purchase. The bonds are subject
to mandatory tendr: (1) on the respective purchase dates for bonds in
the unit pricing, index and term rate modes, (2) upon conversion of the
interest rate; (3) upon expiration or substitution of the LOC; and (4)
following receipt of written notice from the bank of an event of default
under the reimbursement agreement and directing such mandatory tender.
The bank has the option of directing an acceleration rather than a
mandatory tender upon an event of default under the reimbursement
agreement. The bonds shall be accelerated following trustee's receipt of
notice of the non-reinstatement of the LOC interest. Optional and
mandatory redemption provisions also apply to the bonds. There are no
provisions for the issuance of additional bonds.
Bond proceeds will be used to finance (i) the acquisition, installation
and implementation of an electronic medical records system and (ii)
miscellaneous capital expenditures for Catholic Health East, St. Mary
Medical Center, Mercy Fitzgerald Hospital, Mercy Suburban Hospital,
Mercy Philadelphia Hospital and Nazareth Hospital, located in
Additional information is available at www.fitchratings.com.
The ratings above were solicited by, or on behalf of, the issuer, and
therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'U.S. Municipal Structured Finance Rating Criteria', February 28, 2012;
--'Rating Guidelines for Letter of Credit-Supported Bonds', June 20,
Applicable Criteria and Related Research:
U.S. Municipal Structured Finance Criteria
Rating Guidelines for Letter of Credit-Supported Bonds
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