Moody's rates Mountain State Health, Va. and Tenn., bonds Baa1

Moody's Investors Service said it assigned Baa1 underlying ratings to $127 million of Mountain States Health Alliance's hospital revenue bonds.

The bonds include $73 million of series 2008A bonds to be issued by the Health and Educational Facilities Board of the City of Johnson City, Tenn. and $54 million of series 2008B bonds to be issued by the Industrial Development Authority of Russell County, Va.

The series 2008 bonds, which have an expected sale date of Feb. 19, will be variable-rate demand obligations. They are expected to be supported by letters of credit and to carry joint support ratings under that structure, which will be assigned separately.

The outlook is stable.

Moody's said it affirmed its Baa1 unenhanced ratings on $733 million of debt from the alliance. Moody's also withdrew its rating on the alliance's series 2007D bonds because that transaction did not close.

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