Fitch gives eight Bon Secours bonds short-term F1+ rating

Fitch Ratings said it assigned a short-term rating of F1+ to eight series of bonds issued for Bon Secours Health System, Inc. by cities and counties in Virginia, Kentucky and Florida and by the state of South Carolina. The AAA long-term rating on all of the bonds was also affirmed.

The rated bonds include $96,625,000 of variable-rate revenue refunding bonds, series 2005A, and $34,975,000 of variable-rate revenue bonds, series 2002B from the Economic Development Authority of Hanover County, Va.; $88.4 million of variable-rate revenue bonds, series 2002B, from Economic Development Authority of Henrico County, Va.; $51.05 million of variable-rate revenue bonds, series 2002B, and $43.15 million variable-rate revenue refunding bonds, series 2005A, from the Economic Development Authority of the City of Norfolk, Va.; $117,875,000 of variable-rate health care revenue bonds, series 2002B, issued by City of Venice, Fla.; $18.2 million of variable-rate revenue bonds, series 2002B, issued by City of Russell, Ky.; and $33.75 million of variable-rate economic development revenue bonds, series 2002B, from South Carolina Jobs - Economic Development Authority.

Of those, the amounts outstanding are $92,525,000 of Hanover County, series 2005A bonds; $31,275,000 of Hanover County, series 2002B; $53,675,000 of Henrico County, series 2002B; $45,675,000 of Norfolk, series 2002B, and $40.1 million of Norfolk, series 2005A; $4.25 million of Venice, series 2002B; $15.95 million of Russell, series 2002B; and $30.2 million of South Carolina, series 2002B.

Fitch assigned the short-term rating in connection with the conversion of the bonds from an auction rate to a weekly rate mode. The conversion is expected on Jan. 25.

The long-term rating is based on an insurance policy provided by MBIA Insurance Corp. The short-term rating is based on a standby bond purchase agreements (SBPAs).

Wachovia Bank, NA provided the SBPA for the Norfolk, series 2002B bonds, and U.S. Bank NA provided it for the Hanover, series 2005A, bonds. Dexia Credit Local, New York branch, provided the SBPA for the Venice, series 2002B, bonds and the Russell, series 2002B, bonds.

Landesbank Baden-Wurttemberg, New York Branch provided the SBPA for the Henrico, series 2002B bonds; Hanover, series 2002B, bonds; Norfolk, series 2005A bonds; and South Carolina, series 2002B, bonds.

The short-term rating will expire if the SBPAs expire or are terminated.

Citigroup Global Markets Inc. is the underwriter and remarketing agent.

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