NEW YORK--(BUSINESS WIRE)--Fitch Ratings has placed on Rating Watch Evolving the 'C' rating on West Penn Allegheny Health System's (WPAHS) series 2007A bonds, issued by the Allegheny County Hospital Development Authority (PA). Fitch's action follows the completion of a tender offer by insurer Highmark Inc., which resulted in the purchase of approximately 85% ($604.2 million par value) of the outstanding bonds.
The transaction follows the approval by the Pennsylvania Department of Insurance of the affiliation between WPAHS and Highmark and the creation of an integrated delivery network by the two entities.
As part of the tender offer, bondholders consented to material amendments to the bonds' legal provisions and covenants, as well as a reduction in continuing disclosure requirements, although security for the bonds remains a pledge of the gross revenues of the 2007 obligated group.
Fitch is evaluating the transaction, the merged entity's development plans, and the terms of the Department of Insurance's approval, and will also assess whether future disclosure content and practice will be sufficient to maintain a rating. Fitch will update the rating following the conclusion of the review.
Additional information is available at www.fitchratings.com'.
Applicable Criteria and Related Research:
--'Revenue-Supported Rating Criteria', June 12, 2012;
--'Nonprofit Hospitals and Health Systems Rating Criteria', Aug. 12, 2011.
Applicable Criteria and Related Research
Revenue-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681015
Nonprofit Hospitals and Health Systems Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=683418
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=789931
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