The rating on California Health Facilities Financing Authority's bonds, issued for the Hospital of the Good Samaritan, is lowered due to: * Growing operating losses in 1999, resulting in poor debt service coverage; and * Lack of management stability. Credit strengths supporting the rating include: * Strong liquidity, with $93 million in unrestricted funds in 1998, equal to 196 days' cash and 95% of debt, in addition to a non-obligated $56 million endowment; * Growing business volumes; * Recent management efforts including improved managed care contracting, cost cutting, and implementation of a strategic plan focused on enhancing certain premier business lines; and * A good reputation in tertiary care and medical research. Operating losses stabilized in 1997 and 1998 at
