Fitch gives AA- to Banner Health bonds

Fitch Ratings said it assigned an AA- rating to $913.4 million series 2008D-F revenue bonds and the $395.4 million series 2008G-H variable-rate revenue bonds issued by the Arizona Health Facilities Authority for Banner Health. The outlook is stable.

The bonds will be sold via negotiation during the week of Aug. 28.

Series 2008G-H will be backed by letters of credit from a consortium of banks. Fitch said it expects to assign a short-term rating on these bonds closer to issuance.

Some proceeds will refund $734.8 million in outstanding revenue bonds issued on behalf of Banner (series 1999B, series 2002A-C and series 2005A). Banner will use about $570 million in remaining bond proceeds to finance the acquisition of Sun Health Corp. and for capital projects, including construction of a new 24-bed hospital in Queen Creek in northeastern Pinal County, replacement of the emergency department at Banner Baywood, development of the recently closed Banner Mesa Medical Center Campus into a secondary corporate center and construction of a new primary data center at the Mesa Campus.

Fitch also affirmed its AA- rating on $1.78 billion outstanding bonds issued on behalf of Banner Health.

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