Fitch Ratings has downgraded New Jersey Health Care Facilities Financing Authority's $53.3 million revenue bonds, issued on behalf of Southern Ocean County Hospital (SOCH), to 'BBB' from 'BBB+'. Fitch has also revised the Rating Outlook to Negative from Stable.
The rating downgrade to 'BBB' reflects SOCH's posted operating losses in fiscal year ending Dec. 31, 2007 and through six months ended June 30, 2008, weakening liquidity position, and light debt service coverage. The financial deterioration is a result of inpatient admission and profitable outpatient surgical volume declines. Specifically, management attributes utilization volume decline to the loss of several key surgeons as well as to the opening of a competing ambulatory surgical center located 10-miles south of SOCH.
