...The rating on California Health Facilities Financing Authority's revenue bonds, issued for Community Health Systems Inc., is based on insurance from California's Health Facilities Construction Loan Insurance Program (Cal-Mortgage). Under the Cal-Mortgage program, the bonds are guaranteed by the program's own Health Facilities Construction Loan Insurance Fund (HFCLIF), which is funded by up-front fees from new issuers, interest income on the fund, and from the annual premium charged to borrowers (0.5% of par amount). However, the ultimate backing for the program is the full faith and credit of California. In the event of a shortfall in the HFCLIF, the state can continue to make regularly scheduled debt service payments or issue debentures on par with the state's general obligation at the same interest rate as the bonds they replace. Therefore, bonds insured by the Cal-Mortgage program are rated on par with the state of California, and on that basis the bonds are rated '##-'. Community Health...
