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TMCNet:  Fitch to Confirm 'AA-/F1+' Rating on Community Hospital of the Monterey Peninsula, Ser 2011B

[June 17, 2014]

Fitch to Confirm 'AA-/F1+' Rating on Community Hospital of the Monterey Peninsula, Ser 2011B

NEW YORK --(Business Wire)--

On the effective date of June 25, 2014, Fitch Ratings will confirm the long and short-term ratings of 'AA-/F1+' assigned to the $55,000,000 California Statewide Development Authority health facility revenue bonds (Community Hospital of the Monterey Peninsula), Series 2011B. The Rating Outlook is Stable, for the long-term rating. The rating action is in connection with the substitution of the irrevocable direct-pay letter of credit (LOC) previously provided by U.S. Bank National Association (rated 'AA-/F1+'; Stable Outlook) with a substitute LOC issued by Wells Fargo Bank, National Association (rated 'AA-/F1+'; Stable Outlook) and the mandatory tender of the bonds.

KEY RATING DRIVERS

The long-term 'AA-' rating will be based on the higher of the underlying long-term rating assigned to the bonds by Fitch (currently rated 'AA-', Stable Outlook), and the long-term rating assigned by Fitch to Wells Fargo Bank, National Association (rated 'AA-/F1+'; Stable Outlook)), the bank providing the irrevocable direct-pay letter of credit (LOC) securing the bonds. The short-term 'F1+' rating is based solely on the LOC. For information about the underlying credit rating see press release 'Fitch Affirms Community Hospital of the Monterey Peninsula (CA (News - Alert)) Revs at 'AA-'; Outlook Stable', dated April 11, 2013 available at 'www.fitchratings.com'.

Pursuant to the substitute LOC, 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. Additionally, the bond obligor is in the flow of funds to make timely payments of principal and interest due upon maturity, acceleration and redemption. The credit-enhanced ratings will expire upon the earliest of: (a) June 24, 2019, the initial stated expiration date of the substitute LOC, unless suchdate is extended; (b) conversion to a commercial paper, indexed based or term interest rate mode; (c) any prior termination of the substitute LOC; and (d) defeasance of the bonds. The Wells Fargo (News - Alert) Bank, National Association substitute LOC provides full and sufficient coverage of principal plus an amount equal to 48 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 and weekly rate modes. The Remarketing Agent for the bonds will continue to be Morgan Stanley & Co. LLC.

RATING SENSITIVITIES

The long-term rating is tied to the Fitch long-term rating assigned to the bonds and the long-term rating that Fitch maintains on the substitute bank providing the LOC. Changes to one or both of these ratings may affect the long-term rating assigned to the bonds.

The short-term rating is exclusively tied to the short-term rating that Fitch maintains on the bank providing the substitute LOC and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria' (Feb. 24, 2014);

--'Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper' (June 4, 2014).

Applicable Criteria and Related Research:

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749431

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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