Fitch gives Upper Chesapeake Health bonds BBB+

Fitch Ratings said it assigned a BBB+ rating to Upper Chesapeake Health System's $125.28 million series 2008A and 2008B bonds to be issued through the Maryland Health and Higher Educational Facilities Authority.

Fitch also affirmed the underlying BBB+ rating on the system's outstanding parity bonds including series 2007C. The outlook is stable.

Proceeds of the new issue will be used to refund the series 2007A and 2007B auction-rate bonds. The series 2008 bonds will be issued as variable-rate demand bonds supported by letters of credit from Bank of America NA (rated AA/F1+ by Fitch) for series 2008A and Branch Banking & Trust Co. (AA-/F1) for series 2008B. Fitch said it will assign ratings based on the letters of credit closer to the date of issuance.

The series 2008A and 2008B bonds are expected to price the week of Aug. 4.

The series 2007C bonds are expected to be converted from auction-rate to fixed-rate mode on Aug. 8. The pricing for the conversion is scheduled for July 22.

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