Moody's gives underlying Aa3 to Iowa Health bonds

Moody's Investors Service said it assigned an Aa3 underlying rating to Iowa Health System's $150 million of series 2008A variable-rate demand health facilities revenue bonds to be issued by the Iowa Finance Authority.

The outlook is stable.

The issuer expects to sell $75 million of the series 2008A-1 bonds and $75 million of the series 2008A-2 bonds on May 20.

At this time, Moody's said it is affirming its Aa3 rating on $493 million of debt to remain outstanding.

The series 2008A bonds will be variable-rate demand obligations expected to be insured by Assured Guaranty and, subject to Moody's review of the documents, carry Assured Guaranty's current financial strength rating of Aaa with a stable outlook, as well as be supported by standby bond purchase agreements, and will be rated separately. Moody's will, nonetheless, maintain the Aa3 underlying rating.

The bond proceeds will be used to finance a portion of the costs of new hospital facilities, additions, improvements and renovations to existing hospital facilities, equipment, furnishings, parking and land improvements at several facilities, and to pay a portion of the costs of issuance.

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